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

To: Jim Cash who wrote (1978)	12/6/1997 10:15:00 PM
From: Mike Winn	Read Replies (2) \| Respond to of 60323

I second Jim. Companies like Ascend, 3Com, Citrix got into class action lawsuit because of the following: - in the case of Ascend, the CEO and CFO have not been truthful in the past and kept misleading the analysts into believing that they will meet the earnings estimate where in fact, the company missed the estimate several quarters in a row and the stock tanked. - in the case of 3Com, management never discloses the inventory problems. There are also some irregularities in the accounting. - in the case of Citrix, just in the days before Microsoft said that they are going to compete with Citrix, management started to sell their stock heavily but they kept denying that there is any problem. So they are selling based on insider news. In the case of Sandisk, first of all, the company has no known sales problem. Secondly, it is a known fact that the revenue is affected by seasonal factor and the Q1 quarter is known to be slow, so no additional warning is needed. Thirdly, there were no insider selling when the stock was trading high. Management sold some stocks in the mid teen and the last sale was at $28/share. Without any hype and misinformation, Sandisk's management could leave alone the valuation of the stock to the market. If the market wants to pay $40 for the stock, that will be up to the market. I have seen some cases where companies made private placement at a lower price than the market price and the stock still continues to trade at a higher price. Of course, investors with money were able to get the shares at a lower price. Like in IPOs, companies offered the shares to the preferred customers at a much lower price than the opening price. Another problem with Sandisk is the timing of the secondary. The company could have started the secondary at $28 in July-August time frame, and then subsequently, the stock may rise to the mid 30, low 40 and everyone should be happy. But the company may not know back then that it needs to do a secondary. For small investors like me, it's quite frustrating as I have to deal with the volatility of the market, plus I have to worry about what is coming out from the mouth of the company. I wonder myself what should I do at the next earnings release. Should I keep the stock knowing that the earnings will be fantastic, or should I sell ahead of earnings release for fear of what the CEO is going to say? So in essence, instead of being a long term investor and supporter of the company, I am now forced to be a short term investor.