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Technology Stocks : CRUS, good buy? -- Ignore unavailable to you. Want to Upgrade?

To: ted quinn who wrote (6381)	10/3/1998 1:15:00 PM
From: ted quinn	Read Replies (3) \| Respond to of 8193

Some rambling comments: Heartened by French's comments to the effect that equity was going to ride some intolerable levels for awhile. That is the first comment from a CRUS official about the stock price in 3 years. One would have thought that $20 or $15 or $12 or $10 or $8 were intolerable levels for a stock that used to sell in the 50s. Finally becomes intolerable after the board's newest member lost 75% of his investment AND the company lost 50% on its buyback of 6 million shares. Finally, the company can feel some pain that the shareholders have felt. The market currently values the company at $380 million. With $300 million in cash, the business of the company is worth $80 million. Does that sound right? Maybe $20 million for the audio business and $60 million for the mass storage. Not trying to be polemical, just trying to understand the actual value of the company. Can somebody help me out? Why isn't Teo buying more shares at 6? The company is in much better shape than it was when he bought at 16. I have a feeling though that Teo is tapped out. I heard he sank much of his equity from his plastics business into CRUS (never imaging the price would be $6 a year later). He basically squandered a lifetime of hard work and his children's inheritance. Unless he can find some more money to buy more shares and lift the price up to a level where other investors and funds might be interested in buying in again too. His being broke is the only reason I can see for him not averaging down at a bargain price of $6. 5 million more shares would only cost him $30 million. One has to wonder at the selling pressure that has driven the stock to such an absurd low level despite Teo and the company taking 20% off the shares of the market in the past 12 months. I don't think Wall Street likes a company in which the CEO doesn't put his own money where his mouth is. Wall Street sees CRUS as a company whose CEO bailed out 3 years ago and who has no real interest in bringing the share price up. Not only has he made his multimillions by selling his shares 3 years and not buying more, he signals everyone--CRUS employees, investors, Wall St.--that he does not really care about the company, aside from collecting his salary and bonuses. And it is no coincidence that his performance over the past 3 years shows a CEO who has neither the aptitude or desire in doing what it takes to bring up the share price. With the disconnect between his substantial personal worth and the performance of the company, Hack was free to treat the company like a hobby, like a dictator rules a small country--try some Internet chips, buy some fabs, change focus (and company slogans) every other month, etc. He had absolutely no personal stake in whether the comapny succeeded or failed in these new ventures. Why? Because he already sold out his shares 3 years ago at prices in the 40s and 50s. What kind of board would keep a CEO who had almost no personal stake in the company? What kind of Silicon Valley CEO would stay on without having a personal stake in the business? Do your research--the successful tech companies are only those where the CEO has a real stake in the business. No wonder morale is so lousy at CRUS--employees being given worthless options while the CEO refuses to share his employees' pain by taking his salary or undeserved bonus in shares or reaching into his savings account to take a stake in the company. Hack finds T-bills a better investment for his retirement money than the stock of the company he runs!!!