Seeking Alpha

Sterne Agee defends Micron following Samsung report

  • In response to a Morgan Stanley report stating Samsung (SSNLF, SSNGY) plans to hike its DRAM output, Sterne Agee says it doesn't believe Samsung is bringing any new capacity online.
  • The firm is reiterating a Buy and $40 PT on Micron (MU -2.1%). Shares have rebounded a little from their morning lows.
Comments (13)
  • miross
    , contributor
    Comments (18) | Send Message
     
    Searched recent Samsung news and couldn't find anything to suggest that they are bringing on more DRAM supply.... sounds like MS wanted to pickup some MU.
    9 Jul 2014, 12:06 PM Reply Like
  • Stock Market Mike
    , contributor
    Comments (2539) | Send Message
     
    It takes time to bring capacity online. Years.

     

    I suspect that if Samsung projects their own usage rising rapidly, they will begin planning for that no less than 2 years prior.

     

    So if they announce a big DRAM fab, it's because their own internal usage is going to increase significantly... by 2017.

     

    All of this should have next to no effect on the share price today.

     

    -Mike
    9 Jul 2014, 12:40 PM Reply Like
  • Tai Yu
    , contributor
    Comments (815) | Send Message
     
    There are institutions that sell a security while shorting it. They are not around to help us make money and may have ulterior motives for their recommendations. A contrarian approach may not work though.
    9 Jul 2014, 12:32 PM Reply Like
  • tvmule
    , contributor
    Comments (92) | Send Message
     
    Amazing how one silly tweet causes such a drop
    9 Jul 2014, 01:02 PM Reply Like
  • 9kguy
    , contributor
    Comments (8) | Send Message
     
    Amazing and a little disconcerting that share price can be manipulated so easily.
    9 Jul 2014, 02:05 PM Reply Like
  • Mace Meier
    , contributor
    Comments (174) | Send Message
     
    I'd like to find a link to the Morgan Stanley report. Also, why would Samsung tell Morgan Stanley this but no one else? Would that be legal? If the report doesn't exist, is Herb Greenberg in trouble? These dots aren't connecting like they normally would.
    9 Jul 2014, 02:01 PM Reply Like
  • i_am_seeker_2
    , contributor
    Comments (984) | Send Message
     
    Actually, when it comes to rumors passed around on TWTR (or CNBC or any of the other "business" channels, for that matter), the dots are connecting pretty much exactly as they "normally would."

     

    Which is to say, these sorts of rumors almost always turn out to be false, either wholly or partly. Mr. Greenberg and Mr. Cramer both know all about these rumors, having started and spread plenty of them over the years. Cramer even acknowledged it in a video that is available on youtube. Greenberg is notorious for spreading tales that help his friends, either long or short. And no, no one is any trouble except for people who believe them and act on those beliefs. They will lose their money as they continually get whipsawed.

     

    Always DO YOUR OWN DD!!!
    9 Jul 2014, 03:05 PM Reply Like
  • JohnNewman13
    , contributor
    Comments (52) | Send Message
     
    Whose misleading information should we believe?????
    9 Jul 2014, 02:58 PM Reply Like
  • Pogoh
    , contributor
    Comments (50) | Send Message
     
    The balance sheet. Everything else is noise!
    9 Jul 2014, 03:49 PM Reply Like
  • monmad
    , contributor
    Comments (112) | Send Message
     
    Samsung has been building a 7 billion dollar CITY and factories in western China for well over 2 yrs now. One reason for this effort was their desire to have additional capacity for storage chips. I am so surprised not to see some recognition of this factor in all the expert's hopes for MU. Western China ships to Amsterdam via rail over the silk road at lower prices and time than ocean freight.

     

    MU has been my darling for well over a year but I now own 5% of my former position.

     

    Samsung has the customers and their purchase orders seem to flow to Samsung rather than MU which I assume has extra capacity at this moment.

     

    Please tell me why I am wrong to have lost my confidence in MU reaching a dominant position in view of the Samsung competiyion
    9 Jul 2014, 05:44 PM Reply Like
  • i_am_seeker_2
    , contributor
    Comments (984) | Send Message
     
    I have no idea what you are talking about. Perhaps seven billion dollars sounds like a lot of money to you, but it would not build much of a "city." That is the amount that they pegged to build their fab in Xi'an, of which about half will be spent by the end of this year. They are producing 3D NAND in that fab, as well as some packaging for it, and the NAND will be used exclusively for high end enterprise SSDs. There will be no DRAM production there.

     

    You can have whatever "confidence" you please in Micron and Samsung. If you believe what you write, you should short Micron and buy Samsung. But I suggest that you do a lot more research into your investments.
    9 Jul 2014, 06:05 PM Reply Like
  • Pogoh
    , contributor
    Comments (50) | Send Message
     
    DRAM is in Nash Equilibrium. If Samsung were going to do make more DRAM they would be shouting this from the rooftops.
    9 Jul 2014, 07:26 PM Reply Like
  • danirak
    , contributor
    Comments (80) | Send Message
     
    Meanwhile DRAM Exchange suggests: Memory Storage Industry to See Growth Amid Increased Smartphone Demand, DRAM and NAND.
    http://bit.ly/1lVAnIf
    9 Jul 2014, 10:59 PM Reply Like
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