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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Jock Hutchinson who wrote (23782)	4/3/2001 8:35:54 PM
From: uu	Respond to of 25814

Thanks Jock and I hope you are right. But still do you really think today's price of $14/shr (equiv. to $28/shr pre split) is a reflective of the following facts: 1) Cisco and Sun who are LSI's big customers having a heck of a time with meeting their revenue and are feeling a major slowdown. I personally feel LSI will be impacted based on them (if not with any of their other customers). 2) In a recent interview earlier this month Wilf predicted a negative 10% growth for the semi industry as a whole - which most likely he also meant LSI too - for 2001. The current price still assumes LSI is going to grow revenue by about 6% (or at least that is what I am assuming). d) LSI's purchase of CUBE does make sense. However the concerns I have: a) They are going to dilute the shares (0.79 shares of LSI for each share of CUBE). Based on CUBE's appx. 50 million outstandiing shares, the dilution will be in the neighborhood of about 40 million shares. Not much but still that is about 12% dilution to current LSI's 322 million outstanding shares. Can CUBE's earnings and revenue really make up the difference? b) I can see why CUBE may have wanted to be bought out by LSI. And that all has to do with LSI's cash sitting in the bank which is about $1.3 billion compare to CUBE's $50 million. At the same time this also indicates that CUBE was expecting to start losing money and that would not have gone well with its cash, so that is why they figured a bigger guy of the size of LSI can be a nice daddy to them. But what this also means is that CUBE will be a drag on LSI's earnings for the next couple of quarters (at least). The P/S of 1.2 is based on certain assumptions about LSI's ability to meet certain revenues for 2001. In light of all the signs we are seeing from other companies (i.e. LSI's big customers) somehow I have a feeling LSI will not be able to meet its expected revenue and as a result what seems to be low in terms of price to sales ratio can potentially be outragous as we move forward. Also keep in mind in 1998 LSI had about 275 million shares as oppose to its current 322 million which excludes the additional dilution for C-CUBE - and the fact that US economy was not slowing down and it was the Asian problems that caused LSI to drop to its lows of $5-$6/shr. Considering that now not only Asia seems to be getting its problems again (mainly due to Japan) but also Europe and of course the US slowing economy. But of course time is key, and as such LSI should indeed be trading at least 2 to 3 times what it is trading today in 2-3 years... Anyway, I really would like to buy too -- but want to see if I can catch the absolute bottom (!!!!) - or at least very close to the absolute bottom. But I know I can only accomplish this in my wildest dreams! - Addi

To: Jock Hutchinson who wrote (23782)	4/3/2001 8:41:36 PM
From: Webster Groves	Respond to of 25814

OT "BY the way Dipy or Tony (or anyone) do you rmember who played Officer Francis Muldoon in that TV comedy." Trivia questions aren't fun anymore - now that we have the web: car54whereareyou.com -wg