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To: Ausdauer who wrote (18052)	1/9/2001 9:57:31 AM
From: Art Bechhoefer	Respond to of 60323

"...either Eli has achieved significant manufacturing efficiencies or there is pricing pressure on CF cards." Aus, we will probably know more about these possibilities when the earnings are released in a couple of weeks. But there is a third possibility related to both of the above. It could be that SNDK is using a strategy similar to that used successfully by Intel against its competitors. When a competitor brings out a similarly performing chip, Intel typically reduces the prices of its better performing new chips in order to entice consumers to remain with Intel. This forces down the price of competing units to the point where the competitors are always short of cash necessary to do the research and development necessary to design units that outperform Intel. If SNDK competitors continually have to reduce prices, they will have a difficult time obtaining a reasonable return on their investment without cutting future R&D costs. Art

To: Ausdauer who wrote (18052)	1/9/2001 5:21:16 PM
From: add	Respond to of 60323

I think the sweet spot for profit maximization is lower prices. Looks like SNDK is going to get there first. I don't see how the smaller players making cards can survive both because their flash costs are high being non-producers and their manufacturing costs are high because of scale. As long as Toshiba, Mas., and SNDK don't get into a pricing war, things look great. I predict LEXR will be gone by the end of the year as an independent company.

To: Ausdauer who wrote (18052)	1/9/2001 5:23:27 PM
From: limtex	Respond to of 60323

Aus - No need to be torn. SSTI also flash is in the same unwanted boat as SNDK. SNDK was poodling along quite nicely until ML decided that it was time to cut its share price in half. They did and the rest is history. A good lesson in the market. It has nothing to do with fundamentals. It is only a question of whether enough investors want to buy the stock or not. In this sad case there are ptifully few buyers and the stock just tanks. Waiting for the earnings is a regular piece of advice here. Well all I can say is that we tried that in April, July and October. In fact in October out came great earnings and the stock was at around $63 or so. The minute the great earnings were announced the stock tanked. The point is that until there is a fundamental change in the investment climate the stock is simply unwanted if it produces great earnings. If doesn't then my guess is the stock will adjust to a couple of $ less than the cash per share. Best regards, L