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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Roger A. Babb who wrote (10311)	6/19/1998 11:05:00 AM
From: Mama Bear	Read Replies (2) \| Respond to of 18691

Roger, probably not if your looking for a quick gain. From my read of level 2 it runs into a lot of sellers at 8 1/4, and buyers lose interest at the same time. They've only managed to cross 3400 at 8 1/4 out of 211500. An entry as close as possible to 8 1/4 probably wouldn't be bad. It does seem that the believers have been emboldened by the reports of Asensio covering, and that will probably keep the stock afloat, at least until his next press release. Of course it looks like yet another week has passed without an announcement of a deal that only needed the i's dotted and the t's crossed 4 months ago. Barb

To: Roger A. Babb who wrote (10311)	6/19/1998 4:05:00 PM
From: BelowTheCrowd	Read Replies (1) \| Respond to of 18691

MU now terminal? Sure looks like it. TI basically paid them to take away DRAM FABs that are losing money. When a smart company -- which TI is -- pays somebody else to take one of their businesses, you know it's got to be hurting. Latest reports I've seen show that MU is losing $.5 to $1 on each die shipped, and the average sales price of each is approximately $1. Which is to say their manufacturing cost is DOUBLE the market price. Now they look like AMZN. Losing money on every sale, but with the additional manufacturing capability, they can make it up on volume! :-) They are burning a huge amount of cash every quarter just to keep going and are running out. TI's infusion of $750 million will keep them going for a while, but the additional FAB also raises overhead and increases the burn rate. Koreans are churning out as much memory as they can, in hopes of just covering their fixed costs and staying afloat long enough to survive the downturn. That's keeping prices depressed and will continue to do so unless there is either an upsurge in demand or a few bankruptcies leading to cutbacks in supply. MU is also behind in the next generation (64 mb) DRAMs. The only hope I can see for them is if Korea sinks into complete chaos, forcing a closing their FABs and limiting their ability to export. Not an entirely inconceivable situation, but not one I'd want to bet the company on. The company was not in great shape before and I can't see any fundamental good to come out of this deal, yet the stock is up. Would have been a better short a few months ago, but still appears to be a solid one right now. A price in the single digits looks possible. Need to do more DD on this one, but it still looks good. Wish I had followed my conviction and shorted it months ago. Opinions? mg