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

To: Art Bechhoefer who wrote (27887)	4/12/2005 10:07:59 AM
From: pompsander	Respond to of 60323

And adding interest obligation at 5.6% for a cash strapped company.....better get that settlement done as at the current burn rate paying off more debt could get problamatic fairly soon. If Sandisk or anyone else was really predatory, it would appear another opportunity to pummel Lexar has presented itself...just keep lowering ASPs..no margins for Lexar left and the burn rate accelerates. But that would be wrong.....

To: Art Bechhoefer who wrote (27887)	4/12/2005 10:35:44 AM
From: Pam	Read Replies (2) \| Respond to of 60323

Hi Art, Also, note the conversion rate on the LEXR convertible shares. It is quite low, indicating that the common shares are not likely to move very far in the next few years (except possibly down). This development suggests to me that Lexar will be favorable to a settlement from Toshiba, rather than having to go through the lengthy appeal process, at a high cost to both sides. I disagree with you Art. This deal, seems to me, is in favor of the lenders and Lexar was in no position to bargain. The conversion price is low and carries a hefty interest rate. If Toshiba settles, even if at a lower amount, or pays-up as awarded, I see the convertible debt holders making money on this deal as the stock is most likely to go higher, and they will exercise. If they don't get a chance to exercise, they still earn interest at a good rate. I think, the investors probably have reviewed the matter and see odds in favor of some monetary compensation to Lexar from Toshiba. If they are wrong in this evaluation and the judgement is overturned, then the outcome is a bit uncertain. It will then depend on if Lexar is able to turn itself around. Although, I agree Lexar would rather settle for a lesser amount out of court than fight it out as they don't have the resources to drag this on for ever. -Pam