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

To: Steve Lee who wrote (15499)	10/11/2000 4:44:43 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Steve, the info you provided from the 10Q says substantially what I was saying, though I thought that SNDK actually sold some shares, rather than just recording the gain in value when the shares were exchanged. By the same token, if some or all the shares that can now be sold have a market value that is lower than when the earlier exchange and adjustment occurred, then we could see a one-time LOSS on the books. I hate to think what that would do to the price of SNDK in a market like this! Art

To: Steve Lee who wrote (15499)	10/11/2000 4:47:29 PM
From: Sam	Read Replies (2) \| Respond to of 60323

Steve, <<In April 2000, UMC announced a stock dividend of 200 shares for every 1000 shares of UMC owned, resulting in our ownership of 22 million shares additional shares of UMC.>> You forgot to add in the extra 22m shares. But they had to account for the shares because of the merger. They don't have to mark them to market every quarter. They aren't an investment company. In any case, they didn't really get a boost from the unusual gain back in April. They won't get clipped because of it now. This whole sell off is strictly because (a) some people believe that we are near a top in the semi cycle, and (b) others are herd followers who will follow the trend and ask questions later. If this is the top (or if the top comes in the first half of next year), then the selloff is probably justified. If it isn't, then it isn't justified. I think all semis are getting sold, even if their particular segment won't top next year. I don't believe that Sandisk will top then, but what I believe is irrelevant, needless to say. Earnings will out, in the end. I think that there may be a small bounce in response to earnings, and if forward guidance is good (as I think it will be), we'll get a better bounce in late Nov, early Dec, after the election garbage is sorted out. However, we could have a sell off post election if one party controls both the presidency and the congress. We'll just have to wait and see. Sam

To: Steve Lee who wrote (15499)	10/11/2000 5:51:00 PM
From: orkrious	Respond to of 60323

Steve, I did no work looking at this, and it is a question worth answering. Regardless, I don't think it matters whether or not we have to show an unrealized loss after showing an unrealized gain. The market really didn't give a sh*t when we recorded the gain, so it won't care now. It is sales, margins, and operating earnings the market cares about. Several people on the thread talked about the increase to book value, which I agree is important and useful info. But stocks are valued based on the present value of future cash flows, and an unrealized gain doesn't count for squat. Neither will a loss which offsets the gain which never mattered in the first place. I am sure value investors will howl that book value counts, and I don't mean to imply that it doesn't. People look at book value when it comes to measuring downside risk. However, someone who closely examined the book value in this case, which included an unrealized gain (I am assuming they didn't sell any of this stock, I didn't take the time to look) would have noted that the gain was unrealized. All IMHO Jay

To: Steve Lee who wrote (15499)	10/11/2000 5:56:20 PM
From: Ausdauer	Respond to of 60323

Steve, SanDisk reported the shares they received from the USIC/UMC merger as a taxable gain based on the share price at that time. Since then there was a 6-for-5 split (or was it 5-for-4) which accounts for some of the "loss" in share price. In addition, the Taiwanese markets have had a significant correction. In the future, when the actual UMC shares are sold on the open market, SanDisk will take an incremental gain/loss on the difference in share price from the original declaration accounted for the split price. This is my understanding. I don't believe any UMC shares have been sold. I am not sure if there are covenants that require a certain level of equity ownership so that SanDisk has a guaranteed production quota. Aus