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Technology Stocks : LSI Corporation -- Ignore unavailable to you. Want to Upgrade?

To: thomas hayden who wrote (12473)	5/17/1998 2:43:00 PM
From: shane forbes	Respond to of 25814

Thomas: Re: In 1994 LSI had about 100 million split adjusted shares outstanding, currently there are about 140 million outstanding. They must be issuing lots of stock options to their employees, and also really dilluting our equity in a big way 2 things: - Even though they had 100 million in shares in 1994, they also had convertible debt equivalent to I think 11 million shars in 1997. - Then in 1995 there was around 400 million in equity based financing or I think 12 million shares. Add the 2 and that is 23 million of the extra 41 - which means 17 million shares were raised. Now of that 17 million I guess a sizeable chunk is from stock purchase plans. Balance this with say 4 million shares bought backn and I guess we have something like 21 issued through options and stock purchase plans. The other thing to remember is that these options and ESOP type plans bring in about 20 million for the company (of course they are a very good deal for employees - options esp. if the stock appreciates) ---- RE: We went from a current ratio of 3 to 1, to a current ratio of 2 to 1. That is not a good trend and does it concern anyone. Went for the new plant in Gresham - so you should see an accompnaying increase in Plant Property and Equipment. 2 to 1 is a very excellent ratio. Note very little Long Term Debt (if any - can't find 1997 report right now). ---- Re: "the company will continue to contribute to Sony's DVD player, which should enjoy good growth, though likely not to the extent that optimist had hoped" DVD players are a joke of a market IMO. I prefer DVD ROM drives. I initially thought LSI would do well with success in the DVD ROM market. Now I think they will do alright but not as much as say a CUBE. Still they should do quite well with those cards. My sense is that LSI bet on the wrong horse 2 years ago - the DVD player market did not pan out and they have lost 100 million in revenue or more in the last 2 years as a result. Hopefully they have learnt. I think LSI said something like upper single digits in revenue for both DCAM and DVD in 1998 - that is around $100 million this year. Maybe DVD is 50 million (optimistic?) or 30-40 million (pessimistic). This is still a sizeable pot of gold and it will be growing exponentially next couple of years. ---- RE: I'm still nervous though what a big time sell off in this market or a recession would do to this company. The big time sell off is coming this week (unless they mention more mergers!). A recession is a disaster for the entire stock market and all companies in the world. I assume the former is coming and don't think about the latter. Semis tend to drop before a market sell off and then drop some more (!). ---- Shane.