Darspal S Mann
Long/short equity, growth at reasonable price, special situations, deep value

Spansion: From Commodity To A Technology Company

Spansion Inc. (CODE) stock has been a laggard among semiconductor stocks, which may change now that there is strategic and synergistic clarity after its acquisition of Fujitsu's MCA business. Next few quarterly results should change investors understanding of Spansion as a commodity Flash memory company to a technology company. The company should benefit from

  1. A less volatile diversified revenue base with longer lifecycle end-markets like autos
  2. Revenue growth from cross selling opportunities, improved pricing and new products
  3. Margin improvements from consolidating facilities and better Fab utilization rates
  4. A stronger balance sheet with improving cash flow from operations, real estate sales and de-leveraging

Developments over the last few months and the coming 2-3 quarters may be among the most shareholder friendly

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