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

To: Pam who wrote (25606)	4/15/2004 9:09:30 PM
From: Art Bechhoefer	Respond to of 60323

Pam, I did not come away from the conference call with the same view of high inventory as you mention in your note. What I heard was that inventory in xD cards was quite high, owing to the fact that the Olympus and Fuji cameras that use that particular card were not selling as well as had been expected. But I did not get the impression that overall inventory levels were markedly above normal levels. To the contrary, the increase in the number of retail outlets selling SNDK cards suggests that higher inventory levels are justified by the need to keep the 60,000 retail stores properly stocked. And the 60,000 figure that Eli used is characterized as just the beginning. He predicted that 200,000 stores would be created before the market reached a saturation point. Which is also why I doubt that a stock price as low as 23 is in the offing. However, I also do not believe there will be a lot of upward momentum without the entire market performing better than it is now. We are seeing some very healthy looking earnings coming in now, and that could certainly cause the market to go up, notwithstanding fears of higher interest rates. If stock prices improve on average about 10 percent in the next three months, I think SanDisk will add about 40 or 50 percent. If stock prices remain about where they are now, then I doubt that SanDisk could get beyond $35 by the end of the year, despite the great underlying earnings. Art