Intel paid $31.64 per share for MU.
If you do your math, Intel put $500 million into MU, in return they will receive 15.8 million shares. Now, by my calculations, that equals $31.64 per share.
Based on todays closing price, Intel has a profit of 39.8%.
For all you who are buying this stock at these prices are paying a premium price for a stock who had EPS of -$1.10 for the year. You can talk about what they will do in 1999 and 2000, it is only a forecast, many things can happen in the next six months. A lot of people are not looking at the big picture, meaning global picture. Even the CEO (Appleton) said that chips are being sold under cost, including Micron. He is also concerned that there may be a glut of chips on the market. Now, maybe I am missing something, but when you sell chips under cost, how can you have these great EPS forecast in the future? Another factor is that there is a great probability that capital expenditures will slow down, meaning that it will effect the semiconductor industry.
The current price is based on momentum & emotions & short covering, not fundamentals or the big global picture.
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