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

To: limtex who wrote (15933)	10/24/2000 6:19:36 AM
From: Andre Williamson	Respond to of 60323

To all - I don't know why you're all so surprised about SNDK's low visibility. It's entirely understandable for many reasons IMO (and I'll give a few examples I've followed to prove it). First, the street is incredibly myopic. Second, as we've all noted, SNDK has demonstrated a pathetic commitment to its own visibility (IMO they should be hyping those kiosks, and become the "Oh, yeah, SanDisk, that's the company that has the patent for CompactFlash..." company). Heck, those two are enough to explain things. But a third could easily be that SanDisk is still a show-me company in a show-me market. Most of us know how big digital photography will get, but most others don't. Now for examples. I bought CISCO in 1997 when it was valued at $30b and had a P/E of 30. I unloaded it all by the time CSCO hit $100b in market cap a year later, and its P/E had IMO gone through the roof. It kept climbing, as everyone figured out they were the ones building the Internet. Point one, even the obvious is overlooked. Point two, when finally figured out, valuation can way overshoot (again IMO). Last example: Palm. Earlier this year, and when still a part of 3COM, and AFTER the initial IPO sale to the public, the companies' combined valuation dropped to $35/share or about $10 billion, despite their combined $4 billion+ in cash alone, with no debt. Tons of people, from analysts to plebes like me, were adding up 2+2 and trying to figure out why the price out there was 1 instead of 4. It simply was, because the Street and investors didn't seem to have the patience to wait 6 months. And that was for two companies which combined have some pretty high visibility. It will be years, perhaps decades (and probably never) before SanDisk's visibility matches that of Palm. So I wouldn't bet the ranch on visibility solving the problem (though of course it can help :) Andre

To: limtex who wrote (15933)	10/24/2000 9:36:11 AM
From: Sam	Respond to of 60323

Limtex, <<My guess is that our shocked reaction to the lack of movement of the stock price after this fabulous quarter is a slow and painful recognition that the market has had its summer days and that we are heading off into a dark winter no matter how well the company performs.>> Actually, my guess is that this is a Sept/Oct technology swoon that is being exacerbated by macro economic/political issues like the mid-east situation, uncertainty about what the economy and the Fed will do next, uncertainty about the semiconductor cycle, and the very close election where pretty much anything can happen, from a complete change in Congress and the Executive branch to no change at all. I don't think it has much to do with Sandisk itself, certainly not with their earnings/revenue/execution performance over the past year, which as all can see has been stellar. The market looks ahead, or tries to, and if they can't extrapolate the same stellar results over the next 6-9 months, the stock won't be rewarded. Right now, the next 6-9 months are especially muddy, both to me and to the market at large. Sure, you can point to a few stocks that may be doing well right now, but most tech stocks are being punished for this uncertainty. It is a shame from your and my perspective that this is so, but so it goes. But for what it is worth, usually the period from November through March or April is the best time to own tech stocks. Hunkering down, Sam P.S. While I may be being an ostrich here--always possible--I don't believe that Sandisk has seen its highs. Nor do I think that Lexar's latest argument will hold much water with the court, it is another stalling action, and of course, you can never tell what a judge will say to any given argument. But this is an argument that could have easily been made before and wasn't. Sandisk never said that they were going to give away their IP, in fact, as far as I know, it was just the opposite. Many other companies pay royalties, Lexar will have to as well at some point. Reimer showed how fast and loose with facts he can be during the IPO period, when his own lawyers had to rein him in, and said that his own comments opened them up to possible future shareholder lawsuits. He is, IMO, being stupidly rash and impetuous.