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To: Zeev Hed who wrote (34944)	6/15/1998 9:11:00 AM
From: Skeeter Bug	Read Replies (1) \| Respond to of 53903

zeev, i think mike differentiates between the business and management. i know i do. mu is good at mftrg. very good in many ways. they have been incredibly successful to date. just ask the other 13 american companies that went out of business ;-) however, their pr is complete bullsh*t. i feel for the employees. i like to see those pos execs that spew their filth get canned and put out on their butts, though. jmntbho. good luck.

To: Zeev Hed who wrote (34944)	6/15/1998 9:27:00 AM
From: DavidG	Read Replies (1) \| Respond to of 53903

Zeev, Good post. Unfortunately if falls on some deaf ears. Certainly a world of difference from Skeeters contention that MU has "little cash left and Billions in debt".<vbg> DavidG

To: Zeev Hed who wrote (34944)	6/15/1998 10:29:00 AM
From: mike iles	Read Replies (2) \| Respond to of 53903

Zeev, Agreed ... MU's produced good returns over the long run but in a highly cyclical way (reflecting the boom/bust cycle of DRAM ... BTW it does cost a lot to build a fab but that doesn't seem to stop everybody and his brother from jumping into the business at the top of the cycle ... dem bankers got no brains ma). If they survive this downturn, then I agree they have a shot at coining it again in the next upturn ... but you should really look at the risk involved in surviving this downturn. DavidG's talking about the $935 million cash they had at Feb/98 and it's true they showed that much cash on the consolidated balance sheet. But strange to say he never mentioned the liabilities on the other side of the ledger ... and guess what Zeev they had debt (long and short-term) of $850 million (this includes the $500 million in converts they floated last summer to well-informed outfits like Capital Noresearch). I guess DavidG can ignore the $850 debt but in my mind it definitely cramps their style. One other thing is that this is a consolidated balance sheet ... i.e. it includes MUEI and guess what, $341 million of the cash belongs to MUEI ... they can't use it to finance the DRAM business (check out the 10-Q where they actually say this ... it's standard boilerplate). So in my twisted perverse way I don't see a company sitting flush with $935 million cash but rather a company going thru the bottom of the DRAM cycle with practically no cash to spend on plant and equipment (BTW Zeev one of the time-honored ways of beating the competition in capital-intensive commodity businesses is to outspend them at the bottom of the cycle and capture market share in the next upturn ... guess where MU stands in this equation?). The Feb/98 balance sheet is just a moment in time. It tells you something but you can really get an idea of how MU is doing if you track these snapshots over a period of time (BTW this is not rocket science, it's just accounting #101 drudge-work ... but it yields fascinating stuff). Without going into mind-numbing details it shows they had negative cash flow in the DRAM business last quarter of $182 million. A good chunk of this went to finance higher receivables and inventories ... BTW inventories (in dollars) have gone up for the last 4 quarters in a row ... chip sales in the same period have gone from $366 million (last year's Feb. quarter) to $261 million (most recent quarter). This is the new-age MU business model ... higher inventories to support lower sales ... you know Zeev the million-dollar analysts don't mention boring stuff like this and it's not because they don't know about it ... it just doesn't fit in with a Buy recommendation. But it is the sort of stuff they'll talk about when they cut those buys to market perform. Since the August quarter of 1996, management has cut way back on capital spending ... at the same time while the business is shrinking they're investing more in receivables (they must be making Dell an offer they can't refuse) and inventory ... cash flow has turned massively negative ... they have a weak balance sheet (I would classify a net cash position that is less than zero as weak) ... they're in a ferociously capital-intensive, commodity (which unlike those girly boys at Intel they've made no real effort to get away from) business ... and all of this before we get the May quarter results ... and no signs of an upturn yet. In fact, it's starting to sink in to a few analysts that the current quarter will be worse, not better. IMO Zeev, if you're betting MU to survive, you're betting the long shot. That's OK if the price is right but in my view a big mistake at current levels. regards, Mike