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Technology Stocks : Vishay Intertechnology -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (233)	5/23/2000 11:25:00 AM
From: WTMHouston	Read Replies (2) \| Respond to of 384

Ausdauer: As we learned (all too painfully) after last quarters earnings, VSH announcing that its total earnings will be above a certain level tells us nothing about SILI directly. Many of us assumed that VSH's 20% and 25% upward guidance last Q, meant that SILI had to be contributing significantly to those upward revisions. Unfortunately, that was not the case. Right now, VSH's capacitor business is driving the incredible growth. SILI, on the other hand, is capacity constrained -- in a major way. SILI was at 100% capacity last Q and will have only a very small amount of new capacity come on line (late) in Q2. Q3 and Q4 will see some additional capacity, but it will not drive growth like SILI experienced last year. VSH has said that eventually SILI capacity will double, but not all of that (or even most of it) will be this year. I expect no more than 25% to 35% additional capacity this year. I have argued strongly that VSH would not buyout the remaining 20% of SILI -- but that was at a time when SILI was at $100+ and VSH was at ~$45 and when SILI was growing revenues at 10% sequentially Q over Q and VSH was not. The economics just did not make sense. But, neither of those is the situation today. As it stands now, VSH, exclusive of SILI, is growing revenues and earnings faster than SILI. As VSH's stock price continues to climb and SILI's stock price continues to stagnate, a buyout becomes more reasonable from VSH's standpoint simply because it will cost far less than it would have one to three months ago. I think that there are many very valid complaints about the way that VSH has handled the public element of SILI from a stockholder's standpoint. What affect those may or will ultimately have is yet to be seen. But, from what I have seen based on looking back at posts on yahoo from 1998 and early 1999, these complaints are not new. Hope some of this helps. Troy