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Technology Stocks : komag -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (693)	7/11/1998 3:21:00 AM
From: TREND1	Respond to of 848

Eric As an owner of KMAG stock, got letter today talking about July 22, 1998 meeting. They say in letter that book value is $8.35 to $9.30 on 52M shares outstanding. Larry Dudash

To: E_K_S who wrote (693)	7/11/1998 4:31:00 AM
From: Tom Simpson	Read Replies (1) \| Respond to of 848

>I have not bought in but have been evaluating KMAG from a value point >of view. According to my research, book value for the company is >around $11.85 per share. Eric, I'm just a bit curious where you might be getting your numbers from. If I take their March 29, 1998 balance sheet I get a net equity of 565 million over 52.9 million shares out which is book=10.69/shr. The tricky part here is net PPE of 683 million when total assets is only 1026 million. That is a whole lot of equipment capacity (much of it the wrong kind of technology for current MR products) for which there is very little demand. Then there is 60 million in inventories and 40 million in "deposits". I valued this balance sheet at $5.30 back then and the market has come down to just about that neighborhood. What is missing now are the write-offs which will bring book value down from 10.69 towards 5ish (I said towards, not to). The thing to realize is that management can move book value around in that range at any time to fit their need to peddle more shares to get more cash to stay in business. I'm glad you have the courage to predict where book value will be post-financing.. I've not a clue, which is why I didn't buy the stock even when it got to my price. It will be interesting to see how well this market responds to more shares. Best Regards.....Tom

To: E_K_S who wrote (693)	7/11/1998 1:24:00 PM
From: LTK007	Respond to of 848

Thanks Eric,very helpful indeed.You mentioned their assets in Asia being now over valued.One of the disaster events for Komag was they were committing themselves to a large shift of the companies production to Malaysia just when the asian debacle took place. I have yet to hear anything good regards the DD sector having a real rally(that is a rally based on improved fundamentals)--both in the oil sector and DD sector we have had a series of short lived uptrending brought on by investors being drawn into what appear to be bottoms-- and what happens is they get caught with dead money.Good Luck,Max90