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SanDisk: Citi Analyst Ellis Was Right

Are you kidding me? Ellis and the rest of these missfits have been wrong for as long as I've traded Sandisk. None of them understood Sandisk's business model and gave the company's management no consideration having invented the flash card market.

If you wait long enough, everyones right. Eventually, Eli's decisions broke Sandisk with his ventures into the CE market, web hosting and the inability to move newer technology to the market fast enough to differentiate themselves from the competition.

These are the same analyst that are now telling us that Apple is worth only $130 a share. It's unbelievable that so much of the market is moved by these inaccurate forecast and forecasters. Apple will have over $45billion in cash this time next year and will have 3 new markets to sell its wares. Do we get from these analyst foresight into these new markets and their potential to increase Apple's earnings? No, what we get is a fixation on 10 year old markets and gadgets (ipod) that has topped out in its main markets and showing severe signs of saturation. From these narrow minded misfits come lower revenue and earnings forecast that continue to miss the harbor let alone the boat in accuracy.

I for one will be happy when all analyst are gone. Nothing personal but Craig and his elk do more market harm than good.

SanDisk: Risk Down $3, Reward Up $30

I'm sorry but you are late to the party as are most analyst and MM. Dispite all of your partificating around nand spot pricing, Sandisk has never been and is currently not dependent to much extent on spot pricing of nand. One need only look at 2006 numbers where you analyst were expecting, for most of that year, for sandisk to report disappointing earnings. Stock price fail based on your flawed understanding of Sandisk business model a value proposition. However, earnings increased 25% while Revenue increase over 75%. Need more proof that you're full of hot air? Look no further than 1Q07 when nand pricing fail 24% during the quarter but Sandisk, unlike other semi providers that report huge losses in their Nand operations, reported inline earnings (excluding impact of mystems acquisition).

Sandisk global market share expansion and improved cost efficientcies from its latest card assembly plant, increasing average card density is what's currently fueling its top/bottom line growth. Additionally, inventories are low going into the 1Q08 at a time when YoY demand is accellarating.

Although I agree with some of your reasoning, your inability to evaluate Sandisk as card producer and the only one of its kind leaves me to reject your analysis for investment advise. However, these monkeys that listen to you control the price of the stock and for that reason I appauld your positive although ill imformed opinion.

Micron, SanDisk Struggle with Memory

You're exactly why Sandisk price doesn't reflect its earnings and earnings growth. If you knew anything about sandisk you would know that its not a semi-conductor component supplier--despite analyst attempts to paint it as one. What Eli has done was to evolve sandisk into a vertically integrated mfg of flash memory cards and Consumer Electronics business model that is protected by fundamental Nand IP.

This is unique in that most companies abandoned vertically integrated semiconductor business when the Japanese and then the Koreans took over the semiconductor fab business and made it into a commondity business.

Eli correctly assumed as you do in your article that the business of consuming chips will be better than the business of making them. By partnering with Toshiba, Sandisk has an advantage over all consumers of nand as long as they stay at fabrication leading edge. It also has an advantage over the semiconductor suppliers by its fundamental IP.

There was only once in the past 7 years that Sandisk business model didn't work and that was last year when they absorbed both matrix and msystem in one year. Prior to that, you analyst kept looking for Sandisk earnings to turn south against lexar and the other nand consumers as their business model was based on Nand as a commodity. We all know what happened to Lexar.

With the msystem acquisition behind them, we longs are looking for Sandisk to get back to operating margins of 20% and earnings growth of 25%. It's interesting that if you plot the earnings of Sandisk and the price of its stock on the same graph, you will see that Sandisk is the most misunderstood company I know.