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

To: Ausdauer who wrote (19670)	3/15/2001 3:36:19 PM
From: orkrious	Read Replies (1) \| Respond to of 60323

Aus, with $13/share book value and over $7 in cash, downside from here will be limited at long as we don't start losing money. Jay {EDIT} Shorts have to cover too.

To: Ausdauer who wrote (19670)	3/15/2001 4:14:37 PM
From: Road Walker	Respond to of 60323

Aus, Not trying to make you feel better, but over the last three years, Kodak has had 4th to 1st quarter sequential drops in revenue of 23%, 13% and 18.5%. So it appears that seasonality, coupled with the economic slowdown, could produce the results we are seeing. On a brighter note, Kodak has experienced equivalent increases in sequential revenue growth from the 1st to the 2nd quarter. So maybe demand picks up as folks plan for their summer vacations. John

To: Ausdauer who wrote (19670)	3/15/2001 6:29:25 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Aus, when you look at the different kinds of flash memory for similar applications, the only conclusion that can be drawn is that flash memory is a commodity in the sense that you can substitute one product for another. The features in a compact flash card made by SanDisk may be at least partly covered by patents, but someone can also use a SmartMedia card with similar results. Embedded memory is in a similar situation. If you don't want to use one type of embedded memory made by Intel, chances are you can find something similar, but not the same, made by AMD, Tower Semiconductor, SSTI or M-Systems. It now looks as though SanDisk bargained away its proprietary technology through cross licensing agreements with so many other manufacturers that nothing is left in the way of valuable patents except possibly for certain ways of reading or writing files that may or may not have any advantage over someone else's solution. Looking at the latest news, the lower sales predictions coupled with flat earnings suggest that at least some of the sales are coming from inventory, where manufacturing costs have already been expensed in the previous quarter. That's why a drop in sales of 45% can still produce flat earnings, rather than earnings which are LESS than those for the previous quarter. Translating the notion that flash memory is nothing more than a commodity business into a price-earnings ratio, I think that we should not expect to see a PE of greater than 25 or 30 for operating earnings from now on. Anything above that does not fit with the commodity nature of the business. Contrast this with QUALCOMM, currently selling at a PE of 40, but capable of growing its earnings at better than 50% because of its huge patent portfolio and the ever increasing royalties that portfolio produces. Art