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

To: Wyätt Gwyön who wrote (7238)	10/1/1999 10:38:00 PM
From: SBHX	Read Replies (1) \| Respond to of 60323

Possible list : 1. Earthquake in Taiwan : power loss and damage (even superficial) to FABs and assembly houses may cause delay of 6-10wks depending on what each fabless company is using. 2. Temporary fab capacity shortage (which would have been easily corrected in time) 3. Dilution by new issue. 4. Change in sentiment and worry about inflation probably made higher P/E stocks harder to sustain. Any of the above would not have been bad since the sndk story is still compelling. Taken together, plus the fear of the bubble bursting, probably made people more cautious. SNDK is not the only stock that behaved like this. RIMM & NVDA underwent similar movement in the last 2wks or so. ATYT went down about 3wks ago. I do think this is a buying opportunity, but sometimes, short-term corrections can be quite drastic. Even very good growth stocks with very low P/E can get hammered for no real fundamental reason. I'm back in accumulating, having got out shortly after the announcement of the new issue, but I'm doing it slowly probably over several weeks --- dollar cost averaging seems prudent.

To: Wyätt Gwyön who wrote (7238)	10/2/1999 10:23:00 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

The drop in the price looks very similar to what happened to QUALCOMM in previous years. Based on short selling data for that stock, it appears that SNDK is currently subject to the same sort of short selling. The selling drives down the stock, making it attractive at some point to institutional investors who missed out on the bargain earlier. In fact, I would argue this kind of selling is INITIATED by institutional investors hoping to drive the stock down to a point where they can repurchase it in large quantities.

To: Wyätt Gwyön who wrote (7238)	10/2/1999 10:36:00 AM
From: Ausdauer	Respond to of 60323

Mucho, Can anybody explain what has changed in the fundamental picture to warrant a correction from 95 to sub-60--that's going from a bathing suit to a cardigan, and the leaves aren't even off the trees yet! Well, at $95 we were ahead of ourselves. I think that most of us would be willing to admit that. Market jitters, the October Effect, a second secondary (dilution),...are not factors which will inhibit the long-term success of SNDK. The earthquake did shake the fundamentals. I believe SanDisk is being punished for having concentrated so much manufacturing in a single region. For a small company with a business plan that includes a fabless arrangement for production it is probably an unavoidable situation. As cash flow increases and (if and when the secondary is successful) cash reserves build up to a sufficient degree I think we can count on SanDisk entering a second stage of its development where manufacturing is more diversified and less vulnerable. The earthquake was untimely and unpredictable, but it creates enough uncertainty in the near future that a tumble was not unreasonable. It was warranted. It does weaken the fundamentals of the company. As others on the thread had indicated, it is a wake-up call for the B.O.D. I hope they have some back up plans in store. I think we should know within the next two weeks whether they have earned their paychecks. Based on the recent voting for the increase in options I am not certain that everyone feels that they have. The night of the earthquake I contemplated selling off a portion of my holdings. As an investor (and not a trader, or is it traitor?) I decided to sit back and let things unfold. In retrospect it would have been a brilliant idea and with good merit...a change in the fundamentals of this young enterprise. I felt that we were in for a fairly steep decline, but never thought we would see $50/share. If the company is able to demonstrate that it will survive the quake and that it has had the foresight to expand manufacturing capability to meet increasing demand, well then we should see a rebound over the coming weeks to months. SanDisk will not be a heavyweight in the semiconductor industry until it gets the manufacturing down. This goal has not been proven to my satisfaction at this point. It is upsetting. Finally, congratulations to those who shorted SanDisk and were successful. You were correct for all the wrong reasons. Ausdauer P.S. I voted for the amendment for the employee options. I would rather see them prosper on SanDisk's success than a bunch of stuffed suits.