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

To: Steve 667 who wrote (14118)	8/22/2000 4:40:08 PM
From: Tumbleweed	Respond to of 60323

What has me puzzled about this whole Lexar thing is that first of all they aren't stupid. Why would they go to all this trouble with an IPO, building up their customer base, competing and working hard, knowing all the while they are likely to loose it all if they loose the bankruptcy case? 1) Never rule out personal antipathy. These folks do not like each other. I personally know of a case in the computer industry where a vendor changed chips in their miniframe(this is 15 years ago)because the CEO of the Computer company fell out with the CEO of the chip company. I dont know the cost, but it must have been somewhere between $10M and $50M. 2) Is it their money (Lexar's?). Answer, No. Might they get bought out by Sandisk. Yep. Might they get some compensatory amount(large) if that happens? Yes. What have they have got to lose? Diddly squat. 3)Just because they are wrong, and even know they are wrong, doesnt mean they wont throw good money after bad. Look at Iridium. How much money did those folks continue throwing away way after it was obvious that this was a business idea 10 years too late. $1Billion? $2 billion? Tw

To: Steve 667 who wrote (14118)	8/22/2000 6:01:22 PM
From: Ausdauer	Read Replies (2) \| Respond to of 60323

What has me puzzled about this whole Lexar thing is that first of all they aren't stupid. I guess I would contend that stupidity hasn't been completely ruled out as a possibility. I will say point blank that I feel the company is in a difficult legal position right now. No matter how much you one tries to argue otherwise, SanDisk's pursuit of Lexar has been highly successful to date. Lexar also has a $10 million dollar line of credit which could be affected directly by SanDisk's actions. They are not profitable and they are not projecting profitability for another six quarters despite the rapid growth in demand for flash memory/flash film. Also, they do not manufacture flash memory themselves and are dependent on companies like Toshiba, a SanDisk partner. As an investor, knowing what I know about Lexar's competitive position in the digital film market, I would say that the fact that the IPO went forward was a bit surprising. Granted the offering was repriced and scaled down in scope, one still cannot interpret an investment in Lexar as anything but speculative. What I do know Lexar is faced with a difficult burden of proof in the upcoming court case (now only 2 months away) and also faced with a difficult redesign. I am not sure how far $50 million dollars will get them. Ausdauer