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Technology Stocks : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: DavidG who wrote (31474)	3/31/1998 11:50:00 AM
From: psujr	Read Replies (3) \| Respond to of 53903

<<I couldn't believe one of the earlier postings where they were knocking MU b/c its cash level is approximately equal to its debt. That is like saying my $200,000 mortagage puts me in serious financial trouble b/c I only have $200,000 in the bank and it is only a matter of time before the bank takes my $1,000,000 home.<vbg>>> No, it's like saying that your 200k mortgage puts you in serious trouble b/c you now have 200k in the bank, are losing 40k of that every three months, and have no other net positive income. If things continue, the bank would be very worried about your ability to repay your mortgage. Also, you would likely not be able to spend any of that money to build new income producing fab lines. JR

To: DavidG who wrote (31474)	3/31/1998 11:59:00 AM
From: ratan lal	Read Replies (1) \| Respond to of 53903

DavidG That is like saying my $200,000 mortagage puts me in serious financial trouble b/c I only have $200,000 in the bank and it is only a matter of time before the bank takes my $1,000,000 home. I have to disagree with you on that. It is more like saying that your mortgage of $200,000 is greater than the value of your $150,000 house. And sooner or later if you cannot afford to pay your mortgage, you will let your house go inot foreclosure. I have seen a lot of them in California in the last 8 years. ratan

To: DavidG who wrote (31474)	3/31/1998 1:15:00 PM
From: BSGrinder	Read Replies (1) \| Respond to of 53903

I think it ironic that you make a simplistic, inappropriate analogy: "That is like saying my $200,000 mortagage puts me in serious financial trouble b/c I only have $200,000 in the bank and it is only a matter of time before the bank takes my $1,000,000 home." while at the same time calling people "silly" for pointing out that, with a huge negative income for the foreseeable future, MU already has debt that is equal to their cash. It will be interesting to see if bankers think such an argument "silly." Regarding book value, as pointed out earlier, assets that cannot be used to make a profit are not as valuable as their owners pretend. Micron's book value is largely an accounting fiction. Also, Micron's debt-to-equity ratio is 50% higher than the industry's, according to Media General Financial Services. What does seem silly is the refusal of investors to seriously discount Micron's precarious position. Micron may indeed succeed despite this risky business environment, but their stock is priced as if success is a certainty. /Kit