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

To: TREND1 who wrote (33377)	5/15/1998 12:39:00 AM
From: Skeeter Bug	Respond to of 53903

i agree that mu is overvalued at $9. however, i doubt it hits nine by the end of summer. the teens is doable. i'd say single digits has a 10% chance by october, 50% chance for the teens, 35% chance for the twenties, 5% chance for the low $30s. about nil for the $40s. jmho. if we do get a glimpse of reality, though, the fall will be fast, furious and long - maybe 66%. like $95 to $17. like $60 to $22.

To: TREND1 who wrote (33377)	5/15/1998 4:23:00 AM
From: Skeeter Bug	Read Replies (2) \| Respond to of 53903

larry, there i go again. mu didn't lose $100 mil from ops last q. they lost $207.5 million. their loss this q from ops will be worse. maybe much worse. so, let's say they spend $200 million on capex (they wanted to spend much more and may actually do so - this is very conservative) and lose another $200 million from ops - again, following my long, long history of being very, very conservative. that is a $400 million dollar loss. per q. now, mu's balance sheet says they have $1.8 billion in short term assets and $0.7 billion. that leaves $1.1 billion in short term cash to pay for these capexes and losses. let's subtract $400 mill and we are now left with $700 million. another q like this (assuming it isn't worse or this q isn't much worse than $400 mill - and it may be) and mu doesn't have enough short term assets to cover their losses and capexes for another q. either the dram market turns ver much positive in the next 6-9 months or mu is out of cash. then they have to sell assets to raise cash. no wonder they have been doing that over the last several qs. better piece by piece than all at once. their actions seem to indicate they knew this could happen and they have been preparing for it. mu is in dire straights. $353 million is in receivables that they are on their knees praying they will receive. i'd be willing to bet mu is not aggressive in writing down accounts they probably will never receive. so, larry, another year of this and mu's solvency has to be in doubt. 6 months of this and then people will have to begin to anticipate mu's solvency problems 6 months later. at least that's what i think the wall street journal would say ;-)