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

To: Fabeyes who wrote (45666)	5/8/1999 2:39:00 PM
From: phbolton	Read Replies (2) \| Respond to of 53903

A guess at MU's current profitability: Last quarter MU had total costs of about $9+ and at a gross margin of 30% a marginal cost of about $6.30. A generous 15% bit growth at constant COGS (very unlikely, a growth of 15% with a COGS growth of 5% would be vey good excecution following the big jump last quarter) would reduce these to about $7.70 and $5.40. This would imply that MU is losing $1+ a piece but since the spot is still above the marginal they may be making as many as possible. So MU is probably losing $1+ mil a day at the moment. Also, when prices drop that pile of inventory depreciates rapidly. What was a $200 mil pile of inventory at the start of the quarter is only about a $100 mil pile today.