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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: Ausdauer who wrote (5817)	5/26/1999 7:04:00 PM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Press releases can be and often are designed to be self serving. The statements are usually made by lawyers, who have protection if the statement relates to a court document. To charge a corporation with libel could involve not just libel of a person but libel of a product, thereby claiming damages because no one will no want to buy the product. Libel can only be proven if the plaintiff is able to prove malice, which means that the defendant intionally said bad things or incorrect things about the product, knowing they were bad and incorrect, with the intent of hurting the manufacturer. That's a pretty big order, and it's one reason why libel suits usually get dismissed. But before they're dismissed, they can do big time damage to the defendant, and they are so expensive to defend that often the defendant (or his insurer) will prefer to settle out of court. Here's what to look for tomorrow: SanDisk's general counsel will issue a press release that denies all claims and notifies the public that SanDisk will defend the suit vigorously. Some investors will get scared and sell out. The stock price will drop MOMENTARILY. If it gets as low as 23 or so, I probably will be a buyer. Behind the scenes, SanDisk will take pains to assure its customers like Kodak that the lawsuit has no basis. It may take a little time for the stock to recover. I suspect that the slight drop today was due to news of the lawsuit leaking prior to the close of the markets. Another possibility that would explain the lawsuit, and related to the above, is that Lexar decided it didn't want to settle the existing litigation or admit it had no case. Thus, if we were awaiting a settlement of the older lawsuit, given the earlier opinion of the court that SanDisk would probably prevail, we must now lay aside that assumption. This kind of litigation damages both sides, and only the lawyers benefit. It's been like that for 100's of years, as Shakespeare has attested.