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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: shane forbes who wrote (18868)	6/14/1999 4:12:00 PM
From: shane forbes	Respond to of 25814

Lost this part. (LSI has Symbios' assets. Assets produce revenues. Symbios' assets got more productive after LSI bought them. LSI did not write off Symbios tangible assets. Old LSI Q3 really hurt. Likely so did Q4. LSI recovers later than other semis. LSI also falls later. Simplistically LSI is now 1.5 times its old size and simplistically the old LSI if it had not bought Symbios may likely be no higher than the mid to upper 20's. (Remember your simplistic arguments about P/S ratio? Simplistic is what simplistic does.) More than simplistically, ROE = r + (r-j)*(D/E) - with the recovery in the chip sector, this is what made the Symbios purchase worthwhile and LSI's current price $15 higher than it likely would have been. Try and figure this out. I know you can't. Did you see the S&P analyst's comments about the convertible offering reducing bank debt taken up for the Symbios acquisition. Didn't you say it was for capacity expansions? You're wrong again. What else is new. If you knew anything about financial analysis you would have known that LSI was still very strong financially after the 700+mil (?) cap additions in 1998. But you know so little I don't expect much. The 804 mil. purchase of Symbios destroyed the balance sheet and placed LSI in a tricky situation. LSI needed salvation and they needed it fast. You think it was a coincidence that LSI became a lot more open & aggressive about their operations around this time. Maybe they just felt more confident or maybe they felt real desperate to get the good word out. I don't remember Corrigan saying anything good about analysts and yet in a call 2 months ago he says that the analysts following LSI are good or something +ve like that. Corrigan got 500,000 options last year that are worth a pretty penny at this point. He and LSI had a lot riding on getting people to appreciate the company's assets more and more importantly making a good case to get some cheaper financing arranged. Without proper financing a company slowly chokes. LSI could have choked (croaked is a bit much but choaking was still very possible) if things did not recover as quickly as they did. Maybe I'll wait for a 100 songs. Maybe then you'll get it.) -- ending song: Repeat 7 -- 'The base revenues for LSI were $1.85 billion in 1998. Except for a IPR&D accounting writeoff (bogus), the Symbios assets that LSI bought were not subsequently written off. What did take place was a $5.4 million Symbios Integration Accrual. Per the 10-K, page 42, this accrual comprised '$4 million related to involuntary separation and relocation benefits for approximately 300 Symbios positions and $1.4 million in other exit costs primarily relating to the closing of Symbios sales offices and the termination of certain contractual relationships.' Therefore it appears that the $75 mil restructuring charge taken later was for the 'old LSI' and has very little negative bearing on Symbios continuing operations. LSI valued Symbios at a fair value of $804 million - $324 million for tangible assets, $214 million for current technology, $37 million for assembled workforce and trademarks, $83 million for goodwill, and $146 million for IPR&D (this part was written off). In this context, $5.4 million is puny and irrelevant. Symbios' assets (read: abilitly to generate revenue) only strengthened after integration with LSI. They did not weaken. Further, LSI has not indicated that they discontinued anything significant in the Symbios product line. Because they used purchase accounting (versus pooling) LSI can't use pro-forma Q1, Q2, Q3 or full-year 1998 numbers going forward. It is NOT because, as Jock mumbles grandiosely: "It would be a terrible disservice to the company, shareholders, and the public in general.". Give me a freakin' break.' ---

To: shane forbes who wrote (18868)	6/15/1999 2:47:00 PM
From: sea_biscuit	Read Replies (1) \| Respond to of 25814

(As to arguing with Dipy, you have no idea what his portfolio risk profile is. So giving him a hard time is pretty useless. It is not only about returns it is also about risk. Ben Graham would use his 'margin of safety' concept here. Dipy's exchanging returns (possible returns) for lower risk. Nothing wrong here. It is always risk-adjusted returns that count. ...) Good point. Because I sold some of my LSI at a nice profit, the average cost price of the remaining shares (after taxes, commissions... the whole works) is now in the mid single-digits (something like $7 or $8). So, I would be a whole lot more comfortable with any wild fluctuations in its price than, for instance, Addi might be, with his average cost price of $27 per share.