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Technology Stocks : Spansion Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Rink who wrote (3187)	1/25/2008 3:11:35 AM
From: BUGGI-WO	Read Replies (1) \| Respond to of 4590

@Rink - valuation Its clear, that the current situation doesn't look too good, that very much known, but I see SPSN very discounted to peer group. I always look at the DRAM guys, which look these days extremly ugly. I will make two examples of US traded companies, MU and QI. Microns last quarter was around the same as SPSN earnings wise. Because the quarter 1 month prior to the other guys, the bad december will flow into the next quarter - with that I expect MU to loose around 0,5$ for fiscal Q1 (end of feb). If prices don't rise fast, they will report around 0,3-0,5$ again in Q2. These are very bad numbers and what will happen after that is very unknown - noone knows that. When I take the next 2 losses into account, I made an implied book valuation which is around 9$ for MU. This means, that MU trades now near 0,8x implied book. download.micron.com When we look at QI, the numbers were very ugly. Haven't seen these only at the banks or homebuilders. ;-) qimonda.com I expect these losses to continue in the next time, probably a bit less, because QI wrote down some stuff. I have an implied book value after Q2 at 2300Mio. € or 3300-3400Mio. $, which would be around 0,55x book now. At this point, I really don't know, why either QI has to get a higher valuation level compared to SPSN or why SPSN isn't trading at QIs valuation levels? Its that easy, because QI looks now much much worse compared to SPSN. Ok, lets to do the math for SPSN once again from here: investor.spansion.com I'm using an implied book value after Q2 at 1570-1580, which gets 0,25x book value at existing price. So, to reach QI valuation levels, SPSN has to trade at around 6,5 - MUs levels would imply prices north of 8$ now. Again, I have said already a few times, that I see a fair SPSN value now at around 8$. This is implied from historical valuation metrics which are now for our peer group at historic all time lows. Its up to everyone to come to an conclusion, but SPSN is written down from "mister market" - its that easy. If the situation will turn in the 2nd half, I see prices trippling to the end of 2008 -> I expect prices around 7-10$ at the end of 2008. BUGGI