To: Ausdauer who wrote (3590 ) 8/11/1998 6:51:00 PM From: Tom Gebing Read Replies (1) | Respond to
Ausdauer, I agree the Asia factor was a big part of why the stock dropped from the mid twenties, but the suit was the bomb that sent the stock below technical support of 19. If you recall last earnings report, Asia was old, but continued news. The lack of visibility for royalties and the direct mention of the suit is what I believe made the stock lose any hope of recovery . Now at 9 3/4.. and with digital camera market getting stronger by the week - A normal stock in this situation would trade on forward expectations. If Lexar won or wins the suit , then Sandisk has no backbone to its future, like Rambus enjoys with its RDRAM technology. The Asia crisis has more to do with gross margin then with unit sales. If Sandisk has no royalties or fees to offset the lower GM then the company suffers. Thus , the stock price. I think this is where we are at now in everyone's thinking. The royalty opportunity and or licensing fee receipts is what keeps this company from being another commodity business, which has no chance to compete against the Asian companies . Royalties and licensing fees is what we are all here for. Lexar is a direct threat to the future of what will make this company be a leader in the industry. If they get away with it, then why would any other company pay Sandisk for the patent use. This concept is what I believe has hurt the stock the most. With today's news, we may have gotten a little light in the tunnel. But no guarantee.... I agree with you - refreshing but cautioun is still needed.
