WDC/Sandisk Corporation Message Board

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Technology Stocks : WDC/Sandisk Corporation

WDC 159.33

+2.4%

11:35 AM EST

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To: Bill Zeman who wrote (4813)	2/20/1999 9:02:00 PM
From: Rex Dwyer	Read Replies (1) of 60323

SNDK current Valuation attempt: SNDK is both an IP company (royalties) and a semiconductor company (they make chips and cards). They compete against the big boys in the semi business. The IP business is a cash cow. The semi business needs component price firmness, which is happening now, to be profitable. The sum total is SNDK. The IP business is worth about $17 per share by discounting future cash flows at a rate of 7% to 8% or so. Their Semi business has been losing money, but would be worth $22 per share if they traded at 5x sales like MU (Micron Tech). At 3x sales, it would be worth $13 1/4. Sum it up $17+$22=$39 at 5x product revs. or $17+$13.25 = $30.2 at 3x product revs. Rex ($24 5/8)

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