I e-mailed SNDK as both a shareholder and investment advisor. While I agree they are in a silent period when they don't want to make any comments, I think, if everything was going beautifully, they could have said they stood by earlier comments. In fact, I would expect that earlier comments made publicly would hold, UNLESS there are some surprises. The ML rating of 2,2 indicates that they also think the prospects aren't perfect, whether due to competition, lower than expected growth in unit sales, or whatever.
Having had almost 50 years of investing experience, of which the last 18 have been as an investment advisor, I also know that it would be quite normal for someone to float totally baseless rumors in order to get the stock down and take advantage of a bargain. This kind of behavior is more frequent than one might expect. My own view in this case is that the rumor WAS baseless and that this was a successful attempt to use the Internet to get the stock price down to bargain levels. Let's put it this way: If sales or margins were considerably worse than expected, the company would have issued some official comments to that effect (the law requires them to do it). If a sudden change has occurred, then they must still say something BEFORE the official release of earnings. Given that the earnings will be out in just a couple of days, it is more than likely that there are no BIG surprises. Thus, given the growth of the whole industry, the healthy cash position of the company, the patents, the CF standard, and the dominance of SNDK in the sector, I think the stock is presently underpriced. Art Bechhoefer |
