Hey walt, how come you're not pumping for a banker?
Does Uncle Goldie have your exclusive rights?
I don't agree with Ms Scribner figures, but Waltie you're once again proving your total ignorance of wasss happening here with this STX-MXO merger thingy here:
Dummy, you state:
"SO STX will have to generate 20% margin on MXO assets whereas STX only generates 12.5% margin on their own assets and MXO only generates negative margins!"
That ain't the way its going down Waltie!
STX's going to deep six almost all of of MXO's drives, shut down the Singapore plant and just give the old MXO customer, the equivalent STX drive. FYI, last quarter the average STX drive had a gross margin of 25.6%. STX's gets higher margins on its drives for a number of reasons Walter, like using their own heads(look what that did for WDC), better yields,fewer components per drive since they can produce 160 GB/platter drives rather than 80 GB/platter, and a greater percentage of its media is internally produced.
But here's the kicker Walt, STX is going to manufacture the extra drives in MXO's new lower labor cost facility in China, so STX gross margins could be even higher than 25.6% once the line is burned in, Waltie!!!!
Also don't forget, that the additional drive ships will also lower STX's overhead absorption costs-per-drive.