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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (6707)	8/22/1999 8:29:00 PM
From: Craig Freeman	Read Replies (1) \| Respond to of 60323

Ausdauer, glad to have you back! One possible answer to the question of "why so much money?" arises from the worldwide shortage of fab/foundry facilities. To lock up supplies in a tight market it may be necessary to actual buy a substantial interest in a fab rather than just "invest" relatively small sums like before ($51M may be big money to most of us but it ain't much when it comes to fabs). For example, NSM is anxious to sell part of a fab in Portland Maine. The whole thing is worth ~$700M so SNDK could buy a good chunk of it and add some necessary extra equipment for about the amount of the offering. Craig

To: Ausdauer who wrote (6707)	8/22/1999 8:39:00 PM
From: Starlight	Read Replies (3) \| Respond to of 60323

Here's an interview with the SNDK CEO that I just ran across: This is from the 8/2/99 Wall Street Transcript: archive.twst.com

To: Ausdauer who wrote (6707)	8/22/1999 8:42:00 PM
From: orkrious	Read Replies (1) \| Respond to of 60323

It is tempting to take some money off the table at this point, but it goes against my priniciple of keeping SanDisk as a hearty perennial in my investment garden... If we only had tomorrow's newspaper today... I sold 15% of my SNDK (which I only bought seven months ago) 10 days ago at what I thought was a high price, 78. I am sooo tempted to sell more here, but I suspect that these are the same thoughts that the early owners of INTC, MSFT, DELL, etc. had when their stocks had an unbelievable run. Were these gorilla stocks overvalued then? Certainly. But the money kept piling in, because the stockholders knew that their companies were going to dominate their segments, and that the segments' growth was going to be explosive. For the life of me, I can't justify SNDK's current value. But this isn't an internet stock with the company losing money, no barriers to entry, and hype, hype, and more hype. You actually rarely even see SNDK mentioned in the media. As far as I know, the only upgrade was a couple of months ago by Merrill. The stock isn't even volatile. (I admit it can swing 10% in a day, but the chart has been straight up, no breaths, and it hasn't been up 50% down 25, up 45%, down 20.) The more I think about it, the more sense it makes that a bunch of very smart people know that SNDK holds the keys to what is going to be a dominant and ubiquitous technology. They are getting in at prices now that a couple of years hence will look laughably cheap. FWIW, Jay

To: Ausdauer who wrote (6707)	8/22/1999 11:44:00 PM
From: Paul Senior	Respond to of 60323

Hi Aus: It doesn't seem to me that we have to worry too much about dilution. Odd how that looks to me. Must be something to do with the already high price of the stock. For every share of stock that SNDK has to give up to get cash, that cash goes to increase book value. Balance sheet improvement as you point out. Book value is now about $8.00 per share. Sales per share would decrease though (price to sales would increase (assuming constant sales=== which is not correct of course=== over that larger number of outstanding shares). But price-to-sales is already high (about 14.9 per Yahoo, so how much degradation are we talking about?). Looks to me like if SNDK would just put only $15 of every $100 cash they're getting for shares, into a bank at 6%, they'd earn 80 cents from that $15 dollars. Maybe 60 cents after taxes. Capitalizing that at today's pe ratio of about 155 let's us speculate a $93 price support -- no real stock price dilution. And $85 dollars to play fab builder with. If 'twere only so easy. Ah well, fun with numbers. Bottom line though is that SNDK shareholders don't appear to be deserting the stock based on the share issuance. Stock still very strong imo. Could be because of internet rebound, market rebound, SNDK strength itself, or maybe not enough time has elapsed-- who knows? But still, stock behaved (whatever that means -g-) very well last week. (imo) Welcome back. Paul Senior