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

To: Pam who wrote (26208)	6/25/2004 7:22:53 PM
From: limtex	Read Replies (1) \| Respond to of 60323

Pam - Well I am not sure that anyone on this thread predicted that the stock would drop from around $80 to around $40 with two of the best qtrs it has ever achieved, in fact two qtrs that were pretty outstanding by any standards. We seem to have forgotten the scale of the growth we have just seen. The anlaysts and the shorts never predicted what d-cameras would do to the flash memory market. We did on this thread and have been doing so for some time. The reaction to the outstanding earnings was a bolt from the blue and I do not beleive that it was cleaver shorts. My guess is that it is soemthing to do with institutional holders doing fancy things with stocks that they own and computer programs that feel the temperature of the stock and taking real time readings of various parameters of teh sock while it is trading during the day sell it short and carry on doing so as long as it works and it has been working. What would stop that would be buyers but when the stock went on its run late last year and early this year it was in the period just before SNDK joined an index and that always does odd things to a stocks price. Now that the stock is in the index off comes the pressure to buy and you then have a whole bunch more holders who have bought becuase they have to own the index and these guys als o do this protfolio enhancement stuff and there you go. Well why don't all stocks in indexes have the same haircut? I don't know. As for margins when suddenly did all these analysts who don't have a feel for any of the guts of the technology suddenly get a feel for that the margins in this business are disspearing? This too I have no idea but they apparenlty have nothing better to discuss than how badly SNDKs margins are going to be? Actually I seem to recall Eli preaching for years that lower ASPs were the way to build this business and now he is doing precisely that. Has anyone on the thread given a view of margins going forward? I think that is wehre we might usefully start some exploration and BTW does anyone know the date of the announcement? Best, L

To: Pam who wrote (26208)	6/25/2004 9:07:41 PM
From: Robert Douglas	Read Replies (1) \| Respond to of 60323

I would not underestimate the Shorts at all. They do their homework well and are far smarter than they get credit for and better analysts than the people who write the reports. I disagree. Shorts are no better than longs in doing their homework. Yes, there are some very capable short sellers, but the majority are just the follow the crowd momentum types that populate the long side as well. It's actually very difficult to make money shorting stocks because the market trends upward over time. Don't be afraid of short sellers, if you've done your research. Understand the opposing side, but don't think they know anything you don't because they don't.

To: Pam who wrote (26208)	6/26/2004 10:33:52 AM
From: Art Bechhoefer	Read Replies (2) \| Respond to of 60323

Pam, you point out that short positions increased between May 15 and June 15. That increase corresponds with weakness in the stock price but does not predict current pricing of the shares. Data on short positions, because it is only available considerably after the fact, is a lagging indicator. It shows what some investors were thinking earlier. It may influence what some investors think later, but so may other factors, such as recent data on increasing digital camera sales. Putting all this stuff together, it looks to me like anyone would have a pretty difficult case to prove a drop in SNDK earnings. Additionally, SanDisk has not provided any guidance to correct its conservative, but optimistic earlier prediction on earnings for this quarter. That alone suggests that fears of oversupply and attendant pricing pressures are exaggerated. I think the shorts are basing their decisions on market gossip of the sort that comes from people who have little understanding of the technology and the markets served by that technology. Art