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

To: Art Bechhoefer who wrote (26218)	6/27/2004 10:39:56 AM
From: Pam	Read Replies (1) \| Respond to of 60323

Hi Art, I was not looking for those weird one-time kind of risks (shares being stolen) for Sandisk. Neither was I asking you for overall market risks. I was looking for firm and industry (NAND) specific risks. I have stated what I believe the risks are and why the stock is depressed and could even go down a little more (the possibility is there). I would not value this company based on 14x forward looking earnings. You will have to use other methods to value this company. If the supply exceeds demand by 5-10%, there are risks to those estimates and they are being reflected in the stock and constantly getting adjusted as new information about capacity and demand emerges. The stock is depressed because of the risk of oversupply conditions that could happen soon and the earnings can come down very rapidly. Once there is oversupply, there are two ways out- create more demand (which would be ideal) or the weaker players exit and supply shrinks and the demand/supply again come in balance. The new suppliers are very formidable and have good resources and are not going to exit that quickly if they see that the NAND market is eventually going to grow from 5B to 20B in the next few years. Someone had posted earlier that these are tough, thick-skinned and are not new to competition having fought many wars in DRAMs and I agree. <I don't think the short sellers are right or wrong, but when they act in unison, they can create a self fulfilling prophecy.> Well Art, you can say what you want but I think if they (Shorts) were way wrong in their expectations, there are enough big money managers out there to take the opposite side and absorb all the shares the Shorts want to sell. But obviously, the bigger players are reluctant to buy those shares right now because they also see the near-term risks in Sandisk and are on the sidelines till a clearer picture of the landscape emerges. The moment, they see there are no such risks they will start buying Sandisk and the Shorts will start covering and you will see the stock rise very rapidly in a matter of days. In the meantime Shorts are right and they have made more money than we have in this stock! As to the analysts who publish their views in newsletters and other reports, I am continually amazed by some of the dogs that they hang on to. Just today I got a newsletter from (the name will not be mentioned), assuring investors that the really top technology growth stocks are still AT&T and Nokia! I mean, REALLY!> I agree, that's why I said I hardly pay much attention to their recommendations. I look at their reports for information that I do not know and just use it for my analysis if it makes sense. -Pam