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Technology Stocks : Micron Only Forum
MU 207.36+3.0%Nov 21 9:30 AM EST
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To: Thomas G. Busillo who wrote (40419)10/28/1998 9:56:00 AM
From: phbolton  Read Replies (3) of 53903
 
intel deal quick synopsis:
1. MU gets $500 mil
2. MU has to spend it all on RDRAM development/production
3. MU has to meet milestones
4. If MU misses milestones and/or stock drops INTC can convert its class A to more than 15 mil shares (a lot more) of common, INTC gets a minimum of about $450 mil (did not do all of the calculations) in MU stock at conversion time pretty much no matter what happens. The conversion is not "floorless" but INTC can't lose too much.

Lots of restrictions on the "investment", if MU was going to do this, in this timeframe of the agreement anyway then its a relatively low cost loan/secondary and a good deal. Risk to MU is that this commits them to making a product by a date on which there may not be a market for that product. However, the dates (and amounts) for the milestones are not in the 13D so we really don't know when they have to start making the stuff.
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