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

To: Craig Freeman who wrote (14212)	8/23/2000 8:46:21 PM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 60323

Craig, the Briefing.com article shows how easy it is to create errors by simple projections based on historic data. The projections contained in the article would be valid ONLY if SNDK had NO new production facilities to rely on. First, there are more plant facilities available in Taiwan than last year. Second, the joint venture with Toshiba in Manassas, Virginia will start producing next year. The combined new facilities (not including, for the moment, the agreement with Tower Semiconductor in Israel) will provide enough extra capacity to triple profits at a minimum. So it is NOT valid simply to project earnings increases based on historic growth from existing manufacturing plants. A near term stock price target of 150-180 in the next six months is not unreasonable, given the increased plant capacity. This assumes, of course, that overall worldwide economic conditions do not deteriorate appreciably in the next six months. If interest rates went considerably higher, or if inflation went up because of high energy prices, all these estimates would have to be revised downward, perhaps drastically.