Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Craig Freeman who wrote (21056)	10/29/2001 12:20:53 PM
From: Andre Williamson	Read Replies (1) \| Respond to of 60323

Craig, Did SNDK fall? Yes. Did it fall hard? Yes. Were many (most) taken by surprise? Yes. No argument with you there. My objection is to the following implications/statements (correct me if I've got them wrong): a) SNDK has performed (unusual) horribly (ie even in the market context) and worse is to come My points have been that the NAZ has performed horribly. That SNDK has performed 'more horribly' is IMO of irrelevant given the narrow time frame we're talking about and its higher Beta. b) SSTI is somehow radically different (ie 'investment material'), the opposite of SNDK To me they appear very similar - in the semiconductor (flash) business with intellectual property. When posting the chart, I picked 'max' as the time period, and yes, a) I can obviously see that SNDK has a negative return, while SSTI has a return (under 100%, mind you), and b) I know SNDK looks worse when contrasted with SSTI for shorter time periods. My broader point, though, was that both pretty much track closely to each other, and neither is particularly impressive - at this point in time, both have fallen dramatically from their highs, thus 'disappointing.' It seemed to me that SSTI violates some of the very tenets you have put forth as 'reasons to own/hold.' I didn't get (still don't) why (given how similar they are) you picked SSTI instead of SNDK. It's still not crystal clear to me, by the way, that SNDK's patents are toothless and worthless as you seem to imply. Problem is that we don't know how much they are worth. So far this (yucky) year we've seen $40 million in royalties and licensing fees. Recently there's been a drop off, but given that memory prices have been plummeting it seems more an indication of falling prices than of a watering of SNDK's royalty power. (BTW, if you have info on this score, please share :) BTW, a quick check shows that though SSTI's IP (royalty/licensing) cash stream has grown faster, from only 1% of revenues in 2000 to 13% of revenues, SNDK's IP cash stream is 60% higher on an absolute basis ($40 million to $25 million, on roughly similar revenues), and it is also higher as a percentage of revenues (17%) as well! As for SSTI inventory problems being 'over,' well I'm a pure novice at reading financials but when I look at their latest announcement, that's not what I see. Looks to me like the Dec-Sep period has seen SSTI's inventories balloon from $73 million to over $135 million (http://biz.yahoo.com/bw/011017/170645_1.html). (SNDK's, by the way, are now at less than a third of SSTI's, down to $40 million from close to $100 million last December biz.yahoo.com. I may have missed more recent developments on this score, though. Andre