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Technology Stocks : Alliance Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: Czechsinthemail who wrote (7498)	5/13/2000 2:21:00 PM
From: Czechsinthemail	Respond to of 9582

The comparison of ALSC with CY is interesting. As of Mar 31, the asset value of the two companies was essentially the same. However, CY's included much more of its asset base in brick and mortar assets and a considerable portion of its liquid assets came from a recent debt offering. ALSC's assets are primarily liquid assets and they are debt free. My take on it is that in the event of increasing strength in the semi markets, ALSC will see above industry average earnings growth, primarily because of its incremental production capacity. Meanwhile, its investments in UMC, CHRT, BRCM and VTSS will appreciate further adding to the underlying asset value. And the value of the venture investments will increase even more whether ALSC decides to sell or acquire the companies. In the event of a weakening semiconductor market, ALSC's huge liquid asset base will give it a much more favorable position. Since the company already trades well below the liquidation value of their investment portfolio, the market has already discounted major drops in the value of ALSC's portfolio. With lower fixed operating costs, ALSC would suffer less damage in their operating results, and they would have relatively more cash and borrowing capacity available to make acquisitions when the assets are cheap. ALSC has adopted a conservative yet diverse approach to growing the company. The balance sheet is extremely strong and should be improved by the combination of earnings growth, asset appreciation and asset sales from time to time. Its status as a relatively unknown company, which has allowed the deep undervaluation situation to persist, may change after the Barron's article brings more attention and buying to the stock.

To: Czechsinthemail who wrote (7498)	5/13/2000 2:45:00 PM
From: Czechsinthemail	Respond to of 9582

The Barron's article paints a positive picture, but actually understates the positive case. The biggest errors were understating the number of UMC shares following the 20% UMC stock dividend -- they now have 339.6 million UMC shares -- and referring to UMC ADR's, which don't yet exist but will probably have a higher value than UMC ordinary shares following the planned IPO of the UMC ADR's. It's also worth mentioning that the company has been buying its own shares below book value. Hopefully, they've been continuing that practice during the recent price weakness.