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

To: Ausdauer who wrote (9230)	2/19/2000 3:23:00 PM
From: Ron C	Respond to of 60323

Aus & Thread Re: "Wonder also if Sony would risk a product recall (at the retail level) due to patent infringement?" I doubt seriously if Sony would have any involvement in a company unless a particularly involved investigation had taken place. Sony's involvement with Lexar can only lead one to believe that they (Sony) want to acquire the technology that will allow them to manufacture and market the CF "standard" so as not to be caught with another "Betamax" identity. THIS IS ONLY THINKING OUT LOUD. {LEXAR (a subsidiary of Sandisk corp.) enters into agreement with Sony for cross liscense agreement.}interesting concept.

To: Ausdauer who wrote (9230)	2/19/2000 5:20:00 PM
From: Craig Freeman	Read Replies (2) \| Respond to of 60323

Ausdauer, your summary of the Lexar filing inspired me to read it in detail. My first impression is that the IPO was designed to bail out their big investors and management. Lexar has gross margins half that of SNDK and is losing money on every product they sell. This business model may work for Internet companies but it's a sure way to bankruptcy for a hard goods supplier. They have $50M+ in "mandatorily redeemable" preferred shares which they are required to buy back over time. Assuming that Lexar can stall SNDK long enough, they will raise $80M from the IPO and ship the proceeds out to buy back these shares. Lexar's board is also empowered to declare dividends on the preferred shares and to issue more preferred shares without shareholder consent. On top of that, everyone and his brother has warrants and options on the common stock. For example, "On June 5, 1998, Mr. Estakhri purchased 1,076,284 shares of our common stock at a purchase price of $0.08 per share." 8 cents! IMHO, on paper Lexar shares represent a terrible investment. But, despite all the warnings and risks, the IPO market is so hot that Lexar's offering will probably be oversubscribed and experience a record first-day pop. Craig