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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: Charles R who wrote (13311)	7/9/1999 7:35:00 PM
From: Herc	Respond to of 14577

I keep a tally of takeover prices of every publicly traded company that I know of, with multiples of p/s, p/cf, p/e, p/bv. And SIII had negative CF and earnings. So coming up with an intrinsic, or takeover, value was impossible. But the future, not the past or present, is where the $$$$ is!

To: Charles R who wrote (13311)	7/10/1999 6:30:00 AM
From: Jan A. Van Hummel	Read Replies (2) \| Respond to of 14577

In the absence of a predictable stream of future earnings (although we are getting closer) I look basically at the underlying assets base. The current value of their fab stake and cash is abt $14/share and rising (given the current strength of the fab market). So, S3 is trading a 15 % discount on these assets alone. Theoretically, you could own S3 at just above $12/share, sell off the fab, and be left with a cash-rich company that is on the rebound and a market leader in its industry, AND you did not pay a dime for it. The DIMD has the potential to add appreciably to the overall and not just because of the Rio. I would also venture that the fab stake, if put on the market today, might actually go at a premium to market value. So, at this point I consider S3 still rather undervalued and it has been for some time. The lack of earnings caused this depressed state of affairs. However, once they start showing earnings, and predictable ones at that, we should see that stronger reflected in the stock price. Based on what we know today and barring any negative surprises I would think we should be in the low to mid 20s. Solid earnings in the 3rd quarter could bring such valuation (assuming the 2nd quarter will be flat at best). A positive surprise is possible in the valuation of the fab stake and Rio is the wild card. JMHO