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

To: Sam who wrote (18972)	2/7/2001 8:35:03 PM
From: Bargain Hunter	Respond to of 60323

The LEXR operating loss of $14.6M on $16.2M on sales is, indeed, impressive. But even more impressive is that their gross profit is less than 3%. That shows the danger in their business strategy of buying flash memory chips. They managed to get everything wrong: they bought high, sold low and still had excess inventory. On the cc they said that they are renegotiating their supply agreements. It will be interesting to see whether they do any better next quarter. I'm betting that their suppliers (Samsung and Hitachi?) will get the better of the deal. The lock-up period expires this weekend. As of next week there will be close to 50M more shares available to trade. Could get ugly.

To: Sam who wrote (18972)	2/7/2001 11:21:10 PM
From: Ausdauer	Read Replies (2) \| Respond to of 60323

Operating loss of $54.3 million on $88.0 million in sales for 2000. Whew! No company can long continue with numbers like that. Sam, I just listened to the c.c. and analysts expressed concerns about the cash burn at Lexar. Also, one analyst asked about the covenants of the line of credit/loan agreement and wanted reassurance that none of the clauses of the loan default had been tripped. The CEO said the loan was not it jeopardy. At Lexar liquidity is a huge issue. Now they want to buy flash chips on "consignment" like they are selling antique furniture. Will their flash suppliers share the risk just because Lexar gets stuck with expensive inventory they can't move without hefty rebates? I doubt it. Aus