Forum Archive Index - April 2001

["Peter Maiden" <pmaiden@xtra.co.nz>]

That Nasdaq sure is a wild thing. Many of us now watching it's crazy ride which inevitability has to be downwards.

Typical of many stocks that will still fall dramatically sometime in the future is Micron. Even though a semi-conductor company it's share price has actually risen since January.

A summary of it's last quarters result -

Sales in its second quarter were down 42 percent from just three months earlier. The company's gross margins cascaded from 49 percent in its first quarter to 18 percent in its second. Continuing operations at Micron generated a $4 million loss in the latest quarter, versus $359 million earned in the previous one. At that price, the company's market capitalization exceeds $24 billion. In 1998, Micron lost money and its shares traded at roughly 1.3 times its sales. And in 1992, when the company broke even, the stock traded at a price equal to its sales. Its shares now trade at a stunning 5.6 times sales, if you extrapolate out from its second-quarter results.

Micron was down to $36.82 last night. At 1 times sales the price would be $7,45

So there still is plenty of downside in many Nasdaq companies like Micron - which is why there is still an inevitable decline in the index over the next few months.

But then again Baycorp trades at 'more than stunning' 14 times sales. Maybe we should be worried about the NZSE.

Cheers

Peter