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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (25123)	12/16/1997 7:03:00 AM
From: Earlie	Read Replies (4) \| Respond to of 132070

SB: Like you, I've been an MU bear for some time, based on broad semi industry fundamentals as well as company specific problems. It has proven a profitable stance. Yesterday's numbers reinforced my personal view that the company is at risk of disappearing altogether. While the company reported a "profit", reality is that it is bleeding dollars with every shipment. While it will be of no concern to the short sighted, interest costs are kicking in at exactly the wrong time, a bloated inventory must inevitably be written down within the next 2 or 3 quarters, depreciation of Lehi must be initiated, and serious money must be found and spent just to stay in the game, never mind make a return on the "investment" (which it a misnomer). The fact is that operationally the company lost significant money during the quarter. Even were the numbers believable, the big problem is that Micron is no longer able to raise money, given the rapidly deterioratng markets and the lousy and declining results. Consequently, MU is now doomed to fighting a "rear-guard" (and losing) action, wherein cash will become increasingly more important, and the debt load increasingly more pressing. When a company cannot raise cash, the world closes in. I cannot conceive of MU being able to raise cash (especially after the beating experienced by the MUEI purchasers of last year). Is there anything that might save the company? Yes,.....a massive reversal of both the declining demand situation, as well as a loss of roughly two-thirds of the world's current chip capacity, would give the company a fighting chance. Unfortunately, the odds of this occurring are negligible, hence the most likely scenario is for the company to just "dwindle away". Might the company be bought out? Not even possible. No one in the industry is interested in expanding (just the opposite), and the stock is massively over-priced. The more intelligent players recognize that we have entered a multi-year contraction phase and can be expected to begin purchasing the assets of bankrupt companies only when the light at the end of this dark tunnel is in view. While the bulls may well continue to rant, the stock price will inevitably continue to erode. Single digits remains my prediction, and we ought to see it before late Spring. Institutional investors will have no desire to hump what is now clearly a disaster in progress. Let us hope that the bulls do take whatever courage they can find in last night's report........in order that short positions be increased. Best, Earlie