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Technology Stocks : Micron Electronics (MUEI) -- Ignore unavailable to you. Want to Upgrade?

To: bobgh who wrote (2705)	12/22/1997 11:39:00 AM
From: Lee Martin	Read Replies (1) \| Respond to of 4074

To All: I recall reading that some of the other boxmakers looking to acquire MUEI did not want the contract manufacturing business. Now that it's gone doesn't MUEI become a more attractive takeover candidate? I would love to see them get rid of the Spectek DRAM recycling division. IMHO this division should have remained part of MU. Looks like MUEI is one step closer to becoming the "lean mean PC sellin' machine" that we all know it can be with the right management. If they can keep taking market share and get their margins back up, one of the big boys will realize that MUEI isn't going away and come to the conclusion that "hey, I'm tired of losing share to this little upstart, let's make them an offer while their stock is still cheap." Comments? Regards, Lee

To: bobgh who wrote (2705)	12/22/1997 12:24:00 PM
From: Michael Burry	Respond to of 4074

This is huge. I entered my order as soon as I read it. Looks like they are selling it for 1 X revenue which is 2.5 X what MUEI goes for now. I personally liked the business, but now the balance sheet is shored up with about $400+ million in cash, and it packages MUEI for sale to another PC maker. This is classic industrial organization theory - industry explodes, industry slows to solid growth, industry proliferates with many players drawn in by high returns, margins fall, M&A activity proliferates (this step is the present/near future of the PC industry )in order to gain market power and prop up margins, these few then get bloated and inefficient and then restructure with sales of non-essential assets. This sale means MUEI will either be acquired, will be one of the one's that's left, or will be able to do some strategic acquisition of its own - not of a whole PC maker of course. What we really need to know is what other potential bad news looms. I don't see the Asian crisis hurting MUEI's business - if anything it should help IMO. Any opinions? Mike