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

To: Wolf 2 who wrote (12604)	5/25/1998 10:26:00 AM
From: getgo234	Read Replies (2) \| Respond to of 25814

Wolf: I had a trial subscription to Murphy'w letter approximately a year ago and the results were terrible. He had approximately 25 securities in his recommended portfolio and 17 or 18 of the holdings had lost value. My recollection is that INTC was one of a very few winners and I strongly suspect that he is still recommending INTC. I would be amazed if he has broken even over the past two years. He has been strongly recommending LSI for some time now which should be some indication of how well <vbg> his portfolio has been doing recently.

To: Wolf 2 who wrote (12604)	5/26/1998 12:37:00 AM
From: shane forbes	Read Replies (1) \| Respond to of 25814

WW: Re: I think the operative word here is 'small'...heck, the caveats at the end rival the size of the whole summary! Having said that, I agree that it is a start---"A journey of a thousand miles...yadda, yadda, yadda.." (Omar Khayyam (sp?), I think) The operative word used to be "nada" so I am actually pleased with "small". I tell people to look where on a company's web page they have the "shareholder" section. GUI design says important stuff goes to upper left. LSI's shareholder related stuff is in a menu near the end on the upper right - not too good. Compare with some shareholder friendly companies and you might see a pattern (WAG on my part). Actually when I saw the quote about the analyst from Saudia Arabia I immediately thought of that Prince who takes large positions in distressed companies... At some point either late this year or mid next year LSI is going to have to raise some capital. Gresham is eating cash. If demand does not remain strong (for whatever reason) then they will definitely need capital soon. On the other hand if demand picks up very strongly they may still need cash to support the growth in receivables, inventory etc etc.. Heck it has been 3 years since they last raised capital in the markets. Next year would be 4 - that would likely be some sort of record for them. I say convertible debt offering at least by mid to late 1999. If stock has surged by then perhaps plain vanilla equity. To be able to raise cash in an equity financing they must interest shareholders since it is pretty clear to me that most people don't like the company (esp. for its past sins of promising and then not delivering) and many analysts are likely not too keen. (I think the anlaysts should be more keen but that's my opinion.) One of LSI's problems may be that because it is so leading edge (in terms of gate counts per average design) theirs may just be an expensive business to be in - to wit perennial high cap. exp and perennial high R&D and margins that might not compensate. LSI has to hit a ROE of 16-20% and ideally above 20% to be considered a star in the eyes of instit. investors. (I can't see a ROE of 20% unless we have some debt on the balance sheet.) Then again when the high volume chips get going things could change in a hurry and that's the hope. Shane.