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 : Micron Only Forum -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (35948)	7/4/1998 5:24:00 PM
From: Knighty Tin	Respond to of 53903

SB, I replied to one of your earlier posts about how I calculated my estimate that MU burned close to $280 MM in cash, but I don't see it anywhere. I have been cyber-vapored a couple of times, so I'll repeat my thought process, such as it is. First, the raw figures show the cash account dropping $217. Then, MU took on some new debt to the tune of $37 mm. So, you figure without that non-operating injection added to the cash column, the # would have been over $250 mm. So far, this is solid ground. Now I take my SWAG. The co. is in "technical default" on its bank loans. What does that mean? It could mean several things. First of all, on a non-cash basis, it could mean MU has not maintained some of the coverage restrictions upon which the loans were based. No big surprise there, with DRAM in a free-fall that has gone far beyond anything their dim-bulb bankers might have imagined when they suckered into the loans. The second thing about technical default is that some of the interest and principal scheduled to be repaid last quarter may have been held over until this quarter to make the cash position look better than it really is. How much we'll never know because the co. is not telling us everything and the banks are afraid to tell their sad sack shareholders. I Swagged another $25 million simply because that is about 10 pct. of the cash fall that is visible and 10 pct. of reality is consistent with other #s MU has hidden in the past. I could be way off base here, but you have to use something when the real numbers are hidden. Bulls and linear accountants might argue that it isn't fair to count debt added without counting debt repaid. If the company were earning a profit or experiencing positive cash flow, I would agree with them. But in a cash burning situation, debt repaid often is never relent and new infusions of the green stuff become increasingly difficult to find. Hence the scam to secure a loan from TXN. Happy Firecracker, MB