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Technology Stocks : S3 (A LONGER TERM PERSPECTIVE) -- Ignore unavailable to you. Want to Upgrade?

To: JAG who wrote (8371)	12/14/1997 9:08:00 AM
From: Jan A. Van Hummel	Read Replies (1) \| Respond to of 14577

JAG, The Fab should be worth at least the investment of $2/share, likely more because it is already in production and throwing off income, so $2 may be low. After you have done that you own a company for $2.81/share of which $2.23 is cash. Essentially, you buy on ongoing business with sales of a half billion for $0.58/share or less than $30 million. Where can you own the number one producer in an industry that will continue to experience good, if not strong growth over the next 3-4 years for less than $30 million, have an immediate leading presence in the market, and with production/development and human resources already in place? There is no need to dismantle the company. Selling off the fab and replace it with take-or-pay contracts will already make the company so attractive that it would be difficult to pass up. The problem is, you won't be able to buy all the stock at current prices. Even if you would make a bid at $6 or so, you won't gain a controlling interest. Few will let you "steal" the company. If someone bids in the single digits for the company, someone will step up and see to it that the company won't go "cheap." Remember Jaguar. When it looked like Ford was getting a good deal, GM came to the fore, made their own bid forcing Ford to pay $500 million more. It was not such a good deal thereafter anymore. ($500 million at say a low 6 % to be nice, means an extra $30 million p.a. needed to be earned more to cover the additional investment). Despite the current problems and lack of product S3 is much more attractive than it has been all year and it won't take long before that will be recognized. However, we do need to press for changes in the leadership. So far the Board has shown little mettle to deal with the recent problems in a clear and decisive manner. They have fallen seriously short of their fiduciary duty towards the shareholders thereby enhancing the image of a rubber stamp, country club type Board. The Board will have to show some life soon and start disseminating pertinent information to the shareholders about measures taken and why. They will be accountable and we can show our pleasure or displeasure with our vote at the upcoming shareholders meeting. Just my 2 cents. Jan