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To: Skeeter Bug who wrote (47443)	8/2/1999 12:08:00 AM
From: Naggrachi	Read Replies (1) \| Respond to of 53903

So, Skeeter, having said all that (including Tom's analysis,) where do you see MU's price? Say 'round earnings time? $70, $80? :) The bleaker the fundi's are, the higher the price of the stock will go, no? Zead

To: Skeeter Bug who wrote (47443)	8/2/1999 12:38:00 AM
From: MR. PANAMA (I am a PLAYER)	Read Replies (2) \| Respond to of 53903

*** Skeeter I have found a woa man fer you..... personals.excite.com hmmmmmm hmmmmmm hmmmmmmm please let skeeter find this babe and take him frum this MU stage she's twice as big as M Jackson but fer skeeter that's lotsa action

To: Skeeter Bug who wrote (47443)	8/2/1999 1:58:00 PM
From: Thomas G. Busillo	Read Replies (3) \| Respond to of 53903

Skeeter, the TXN and INTC investments last fall really saved their bacon. $363 mil. of their cash & equiv + short-term securities are MUEI's. So figure about $1.297 bil. So the $500 mil. from INTC and $750 mil. from TI were indeed very timely. Without that - yeah, problems. But they got it and it's there. I think they also have $400 mil. in credit arrangements they haven't tapped into. Plus they still have another $500 mil. from the '97 shelf registration related to the $500 mil. in converts As far as paying back the principal, roughly 70% of their debt is convertible debt. So they may never have to pony up the principal in cash. They can weather the storm. (I think <g>). But in theory, if you're producing a product with low differentiation, over time, competitive forces should generally move the ROIC down to the cost of capital or at the very least limit the long-run spread between the players ROIC and WACC. That's sort of what the $17 EPS nitwits choose to ignore way back when. That's also what happened in this industry. Their ROIC was phenomenal back in FY94 and FY95. 56% and 69%! That was insane. No one in their right mind should have looked at this industry and thought "this will continue". Competitive forces came into play. ROIC FY97 and FY98 was 8.75% and -11.7% Here are the last 5 years: FY'93 FY'94 FY'95 FY'96 FY'97 FY'98 revs. 828.3 1628.6 2952.7 3653.8 3515.5 3011.9 COGS + op exp. 662.4 1008.5 1656.2 2695.6 3119 3471.2 EBIT 165.9 620.1 1296.5 958.2 396.5 -459.3 cash taxes -22.1 -197.4 -438.6 -403.4 -122.9 -21.7 NOPLAT 143.8 422.7 857.9 554.8 273.6 -481 Invested Capital 751 1,238 2,135 3,128 4,086 3,932 ROIC 56.29% 69.31% 25.99% 8.75% -11.77% Avg. NOPLAT (94-98) 325.6 Avg. IC (93-97) 2,267 ROIC based on Avg. NOPLAT/Avg. IC = 14.36% I estimated their WACC around 15.67% using a beta of 2.08 (regressing monthly returns against the SPX's for the 60 months ending in June.) If you work up a beta regressing monthly returns against the SPX for the 60 months Aug 93-Aug 98, it's 1.47. And then if you're crazy enough to do it, you could try and come up with a ballpark figure for WACC over that period based on their MV of debt and MV of equity. My admittedly inexact and sloppy methodology gave me a guesstimate of 13.51%. From Aug 93 to Aug 98 the stock price went from 10.53 to 22.75. IF ROIC was 14.63, and the guesstimate of WACC was 13.51%... ...what was my point? Just a long-winded way of saying what everyone knows already. This is a cyclical industry. You can't judge them on the top of the cycle or the bottom. Over time, exhorbitant returns on invested capital in industries with low potential for product differentiation tend to average out close to the cost of capital. Good trading, Tom