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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Craig Freeman who wrote (3391)	6/26/1998 12:24:00 AM
From: Ausdauer	Read Replies (1) \| Respond to of 60323

IMHO... The royalty agreements are confidential, Craig, but if you go back and look at some of the posts from last summer and fall there are references. IMHO the recent (late 1997 and early 1998) ramp up in royalties has probably occured in concert with lump sum payments for newer technologies such as CF and this is why the Company is vigorously pursuing Lexar. I suspect there will be an ongoing inflow of royalty revenues based on product sales linked to the original licensing agreements. Some of these monies are held in deferred revenues currently and may be liberated as competitors products sell at retail levels. The accountants may not wish to recognize these as revenue until they are certain they need not be refunded, just like they do for sales into the channel. The actual dollar figures have remained stable in the range of $20 to $24 million if I recall correctly from the past two quarterly reports. There is simply no way SNDK could negotiate future royalties if they make their contract negotiations common knowledge. You would never play poker and show someone your hand. You gotta hold your cards close to your chest. The stage is now set for negotiation of MMC cross-licensing fees for 1999. The press release which forewarned of the earnings letdown also indicated that quarterly royalty revenues are slightly down from Q1 which topped $8 million. That means they still could do $25 to $30 million in royalties alone this year. (Just over a dollar a share) Recall that the earnings projections for 1999 has not been beaten down as much as 1998. The analysts must know something about a steady undercurrent of revenues which is pushing the company along, albeit slower than we as investors have hoped.

To: Craig Freeman who wrote (3391)	6/29/1998 11:45:00 PM
From: Ausdauer	Read Replies (2) \| Respond to of 60323

Craig, I guess I am a bit disappointed with the thread. We used to have relatively level-headed discussions on this message board until the recent stock price volatility. Now Jerome has sold his position as well and everyone is pointing fingers at stock manipulation and insider trades. I weighed in on these issues already, including the timing of the recent press releases. I became interested in this stock after doing my own independent research, reading the annual report, going over the balance sheet, incorporating some of the views offered by SI members on this thread AND buying and using the company's products. I also was strongly influenced by Jerome and Rex's detailed analysis of the stock last fall. It is easy to become intoxicated with this company. At the present time, for all the reasons I have mentioned, the near term will be strongly influenced by retail sales and the ability of the company to defend its intellectual properties. I have personally seen my stake in the company fall by 33 1/3% over the time I have accumulated shares. I am still not willing to hold an issue for 3 months and then dump it without a fundamental change in the company's position in the market place. Current investors are betting that Lexar Media will lose their case. My comfort with the stock is directly proportional the strength of my belief that they will be successful. However, there are no guarantees. This litigation antedated my intial investments in the company. We can talk about licensing agreements and royalty payments until we are blue in the face. At this point the discussion has become somewhat repetitious. I have copied a relatively recent post. Perhaps each of us could strive to find out about the company's position regarding the "package assemblers" which I have mentioned in prior posts. Still nobody has posted any convincing information about stock price manipulation and insider selling. Some of the posts both here and on the Yahoo! thread are libelous..."defamation by written or printed matter"... in front of an audience of untold numbers. To: Craig Freeman (3134 ) From: Ausdauer Friday, May 29 1998 6:39AM ET Reply # of 3402 Craig, My understanding is that the CFA (CompactFlash Association) allows members who pay dues and follow the CFA guidelines for interconnectivity/compatibility to display the CF logo. In that way the standard can gain wider acceptance with a larger number of design-ins, deeper market penetration and greater end-user recognition and acceptance. The CFA does not require chip manufacturers to follow Sandisk's recipe for CompactFlash and it would be possible to design around some of the patents and avoid paying royalties. The 10Q suggests that this is plausible. I do not think the CFA was created to guarantee royalty payments to Sandisk. The point is, I really do not understand the arrangements and nobody has been willing to explain it to me. Royalty and licensing arrangements are confidential and therefore you get stone walled if come anywhere near that subject to management. I think it wouldn't be a breach of confidentiality to at least mention plans to seek royalty payments from independent producers that may be bootlegging SNDK technology/intellectual patents.