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Technology Stocks : CRUS, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: Phantom Dialer who wrote (5078)	2/19/1998 3:12:00 PM
From: cbstock	Respond to of 8193

HI Dialer!!!! What a good post!!! Thanks for taking the time to give such a robust discussion. The over capacity issue in various areas of the semi industry like CRUS and CY ect. have had an affect for a couple of years now... When this happens in other sectors, i.e. banks then mergers and take over's occur. A company can be purchased cheaper on wall street than to build it from scratch. Also with the critical shortage of technical people , buying a company full of them is a good strategy.... I personally do not think a player like Teo would just buy CRUS for a few points of stock value growth. If that were the issue then he would buy Dell, or one of the drug companies where the liquidity is there to get out with his profit. I have followed CRUS on various boards for over 3 years and read many hundreds of posts. The optimism for this stock, and also frustration has been aggressively stated. We just can't wish the stock up. If CRUS has $300M in cash then there is a big risk that they can be bought with their own money. If Teo and others band together and put their own people or them selves on the board then they can force the management to use the money to drive the dickens out of the stock by buying it back. Think of the increase in valuation if there were only a few million shares of stock left to trade. This is one of the strategies of take over artists. They then sell the company and walk away even more rich. Why would a company have $300M in cash and not be aggressively using the funds to grow the company and increase share holder equity. Spending the money this way would change the PE from 23 to 13 reducing the shares outstanding from 68m to half that #. They continue to use the money to expand capacity but the sales $ are not even growing as fast as the rest of others in the same industries. (Zacks) The market cap is less than the annual sales and companies like this are very cheep and there is a reason. The managers just are not cutting the mustard. 21% of CRUS is owned by institutions and the recent short interest is 3.2M so even short covering would only drive the stock up about a dollar. There has been good news on and off for over a year and yet the stock has continued to slide. I haven't reviewed the credentials of the board members recently but when a company is doing this poorly, it usually indicates that they are in management's pocket. A good board of outside directors would have large personal holdings and would be aggressively pushing management to increase share holder equity...Keeping or getting rid of the board expense wise would have little impact. Usually they are only paid around $50k/year or so... Most board members get rich from the company and the stock they have control over. Thanks again!!! Regards cb