Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cymer (CYMI) -- Ignore unavailable to you. Want to Upgrade?

To: Tulvio Durand who wrote (11940)	12/24/1997 10:25:00 PM
From: Zeev Hed	Read Replies (4) \| Respond to of 25960

Tulvio, about two month ago, someone introduced me to a little stock, CTYS and it was 7. For a number of reason I felt the stock would drop dramatically and called for 4 by end of the year and under 2 by March next year (it is now 1/2, so I was wrong and ths tock dropped much more). But the point I would like to make is that one of the posters kept bringing up "Salvation" scenarios, where Bear and Stern who owned some debt and maybe equity will come the the company's rescue, any minute, B&S "must" support the price at 6, he chanted, and then at 4 and then certainly at 2 and so on." The point is that when the chips are down, and the bank loan money only to companies with a debt to asset ratio in the 1:1 or maybe 2:1 ratio, no new money will be loaned to companies with debts in the 4:1 ratio. That is very simple. Yes Korea will have to fall behind in the race to .25 or close massive amounts of their .35 and sell it cheap to raise the money to go on a limited base to .25. Few companies might have the wherewithal to go ahead in a massive way out there. In there spot, I would generate as much cash by flooding the market with what I have to get a little liquified, but only few of the chabols are in a position to do that. A Company like Samsung might have to make a decision of whether to keep running in the forefront in semi or in PC (and few other choices they have). They may decide to sell their AST operation to generate cash and reduce debt, or concentrate in an area where they have dominance and thus pricing power. I think that the Korean Semi is going to contract and contract dramatically, and it will take a good five years of slow build up to regain their prior position. This is simple business reality, not wishful thinking. Once some of the pokker players fold, those left in the game may not have the urgency to "modernize" at the same rapid pace simply because the competitive pressures will be reduced. Zeev