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

To: Howard R. Hansen who wrote (24195)	12/8/2003 7:26:09 PM
From: Mike Buckley	Read Replies (2) \| Respond to of 60323

Howard, I don't think there is a clear-cut method of quantifying the risk and reward of the decision to invest in the new plant. I say that because of my experience about a year ago when a very astute, disciplined analyst presented a method for quantifying whether or not an acquisition of a company is likely to add or destroy shareholder value. On the surface, everything made sense. However, when I applied his method to an historical acquisition that both of us were very familiar with, his method concluded that the acquisition would destroy shareholder value. In fact, the acquisition added hugely to shareholder value. So, that exercise confirmed for me once again that numbers only reveal a certain amount when considering the efficacy of a significant investment of any kind by a company. There has to be a mix of quantitative and subjective reasoning in order to come up with a valid conclusion that investors can act upon. --Mike Buckley

To: Howard R. Hansen who wrote (24195)	12/8/2003 10:28:38 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Howard, there is another dimension to the decision to invest in a new plant besides the one we've discussed here. What if the plant and the manufacturing processes are so efficient that they can undersell Samsung (assuming that Samsung has lower labor costs and theoretically can undersell most other manufacturers)? The a new market for the SanDisk/Toshiba plant is supplying wafers or finished products to other manufacturers. At the moment we're considering only the issue of SanDisk building and running plants for its own use, or for Toshiba's customers. Maybe this new plant will make SanDisk and Toshiba the lowest cost producers. Art