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

To: KevRupert who wrote (19326)	2/26/2001 11:17:55 AM
From: Art Bechhoefer	Respond to of 60323

It's true that the only effective vote most investors have in regard to public companies is to buy or sell the stock. Rarely does an individual shareholder have any weight in the choice of directors or major policy questions. The disclosure laws, nevertheless, give individuals a certain amount of scrutiny that can help focus management on its main objective: To run the company to the benefit of its owners by taking advantage of its intellectual property, products, and services and their acceptance in the marketplace. Since I invest for the long term, and since SanDisk remains dominant in at least some portions of a rapidly expanding market, I rely on the securities laws as a tool in protecting my investment. For the sake of comparison, one could have pretty much written off Apple Computer as a reasonable investment 15 years ago. The management had a history of diluting its shares by providing extremely attractive stock options (and loans to buy the options) to its top managers. The company also had an extreme amount of arrogance in assuming that the original Macintosh was so good that if you tried to improve it, you would void the warranty by even removing the case! Thus, while the Apple II could be customized to suit individual needs, and the IBM PC also could be customized, the Macintosh discouraged such innovation and eventually gave up almost the entire business market as a result. I don't see that kind of arrogance in regard to SanDisk. What I do see is a certain reluctance to inform shareholders on how the company expects to make money over the long term. The financial and managerial assets are in place, the product line looks good. What we don't know is whether to regard profit margins as typical of a company with patent protection or simply one of many producers of what is becoming little more than a commodity. The issue then comes down to valuing SanDisk similarly to other tech companies, like Dell, or companies with strong patents, like QUALCOMM. Art