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

To: Ausdauer who wrote (15830)	10/22/2000 11:21:16 AM
From: Art Bechhoefer	Respond to of 60323

Here's how the Tower investment appears to work: SNDK buys new shares in Tower Semiconductor. The cash infusion goes toward building and equipping the new plant. Other cash is provided by Tower and by an Israeli govt. grant. When the plant is completed, it becomes an asset and shows up on the Tower balance sheet as an addition to total assets. Since SNDK owns TSEM shares, these shares gain book value. The gain in book value exceeds the construction costs because there are multiple sources of funds, not just those of SNDK and TSEM. If the investment turns out to be as good as the one made earlier in Taiwan, then the shares of TSEM could increase in value, giving SNDK an unrealized (and not accounted for until it is realized) capital gain.