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

To: Ausdauer who wrote (10753)	5/2/2000 7:22:00 PM
From: Binx Bolling	Respond to of 60323

Time to hype up the sales force! When is the next Sandisk sales meeting?

To: Ausdauer who wrote (10753)	5/2/2000 7:23:00 PM
From: Michael A. Gottesman	Respond to of 60323

Picked this up off the Motley Fool message board. I'm trying to get info on whose article this is from the poster on Motley Fool. I like what it says but I'm suspicious since the info about UMC doesn't seems right: MP3.com, meanwhile, has a potentially more serious problem. The company, >like others on the Internet, allows users to download music without paying a >copyright fee or other royalty to the music publisher. The court found that >this is just another form of illegal copying. Companies that were >anticipating selling music and possibly other copyrighted materials, such as >books, will now have to reconsider. Among the companies that will benefit >mightily from this ruling is SANDISK, which designed copyright protection >into its "Secure Digital" flash memory chips used in pocket MP3 players that >can download music, but only if the user has a credit card account for >charging the copyright fee. SONY has also built this protection into its >MemoryStick, an inferior version of the SanDisk flash card, which currently >is so cumbersome to use that consumers are turning away in droves. A more >recent entry into this market comes from software developed by MICROSOFT and X >EROX, which has built-in copyright protection. It is too early to determine >which system will predominate, but the SanDisk card, an open design accepted >by some 50 manufacturers of chips and consumer appliances, looks like the >lowest cost, easiest to use alternative. SANDISK, as noted above, through its superior "secure digital" design for >flash cards used to download music and books from the Internet will now be >the chief beneficiary of the court copyright ruling against MP3.com. The >closing price of 92 last Friday makes no sense, not just because of the MP3 >ruling but because of the rapid growth in demand for flash memory cards, >which are unique in having low power requirements, great reliability, and no >moving parts. There is an additional factor, apparently not appreciated by >most analysts who follow this stock. Last year, the Taiwan Semiconductor >corporation acquired the UMC chip factory, almost 50 percent owned by >SanDisk. SanDisk received $209 million in cash, but still holds shares worth >approximately $450 million in the acquiring company, the sale of which is >restricted for six months. So SNDK shareholders will see an item on the >balance sheet, known as "cash and marketable securities," in which this $450 >million investment is valued at the lower of cost or market value. In this >case, cost is somewhere near $30 million. Thus, the book value of SNDK >shares is now understated by about $7 per share, and the future earnings from >the sale of the remaining Taiwan factory shares are not even factored into >the price of the stock. That is why a price of 92 is simply ridiculous. >Putting all these factors together leaves one with the conclusion that SNDK >is a RARE BARGAIN. > >HOW CAN that situation occur in a free market where information is available >to everyone willing to look for it? In the case of SanDisk, it's a bit more >complicated. Turns out that some 4 million SNDK shares held by SEAGATE, a >disk drive company in the process of being taken private by its management, >were sold to help finance the restructuring. At least 30 percent of the 66 >million SNDK shares are closely held by company officers, directors, and >large institutions with no intention of trading their shares. That leaves >less than 40 million shares available on the market. The addition of 4 >million shares from Seagate is difficult to absorb, given the recent turmoil >in the market for technology shares. This is the only explanation I can find >that could account for the current low price. Long term investors will know >what to do about this temporary situation. A.S.B.

To: Ausdauer who wrote (10753)	5/2/2000 7:48:00 PM
From: Danny Chan	Respond to of 60323

Ausdauer, I happen to notice this from the link below and they indeed mis-spelled ... cbs.marketwatch.com btw, thanks to the detailed answer. I may need to ask some more as I go through it tonight.