Declining ASP"s are almost a given in the industry because of increasing chip power. A 4gb chip replacing 2 2GB chips will have the 4gb price slightly less than the 2 2gb ones, and that makes purchasers feel like they should migrate higher and pay slightly less for = power. But the cost to produce 1 chip is significantly less than to produce 2 lower power chips, and that is where it doesn't matter that ASP's are falling, as long as they don't fall below the cost differential.
Your math on $3 or $.50 is accurate and thus why MU stock price being this low is absurd.
I honestly feel that if the Attorney General announcing today that they will look into if high speed computerized trading violates any insider trading laws, they ought to look into the entire question of IF MM's also violate laws of free market/non manipulating activities. It seems to me that when there can be manipulative destruction of many for the benefit of the few ( MM's ), this is not right, nor should it be allowed or not looked into. Something needs to change or this market will just become computers trading between themselves, and manipulation the name of the game. If some say that's the way it is, then for the sake of the individuals investors, it must change back to a non rigged/manipulated trading mechanism. Enough is enough!
Sometimes it feels like noby wants to give MU a break, lol. Great ER, forward optimism, increasing cash flow and FCF, and yet the day after all this, the NAZ has to endure one of it's worst down days so far. All boats being taken down today. With all the forward thinking on where the stock price should be, it is mysterious where is all this selling volume coming from. If day trade shorting, then it will go back up before the end of day if they close out for profit, and it is not short covering because it would be higher, and probably not from institutions that feel the dynamics are for even higher prices. So, that leaves MM manipulation, but do they have this much stock inventory to counter the volume surge today, OR is it computerized sell programs that sell based on direction but not on anything else, and the selling begets more selling? In any event, what an opportunity for shorted shares to cover before the upturn, over 100 million shorted shares.
A beat on everything, solid forward guidance, improving economy, improving cash position, low p/e and getting lower, high short interest = doesn't add up to a declining stock price, even for today. It does not compute.
A recipe for what we are seeing today. This will be the type of day that anyone who does not want to see a down day should turn the screens off and go enjoy the day at an amusement park on one of their roller coasters. At least that might be more fun. If the NAZ starts to recover, even half, MU might reignite. Thank goodness for those not having to live and die by day trading.
As of now, how right you are. Fundamentally, with the ER and forward positiveness, this may be the last of $24ish pricing for MU. Unless the stock market does a major 10 to 15% correction, I don't see MU going anywhere but up for the future. This action today is why I mentioned in a previous post that I am staying away yesterday and today an will wait till the dust settles Monday or Tuesday before I re-evaluate trading strategies in MU.
BTW, that stockgirl never answered my request all day yesterday for he best guess on today's MU closing price. She came onto this board like a bull elephant in a China shop. Hope she stays away. Disrupted the board and i don't even know why, is she even a MU holder? You flushed her/him out .
I am still hoping positive investor buying will overwhelm any selling today based on the ER, so I look for a close much higher than where we are now near $24. But the NAZ needs to cooperate too.
Best to you XQ
You can be assured that if MU is up a lot by the close, he will talk about this on his CBNC show tonight and saying fantastic things about MU. Anyone, and i mean this, who sells this stock right now and absolutely does not have to, is leaving future money on the table, and maybe significantly so. If these sellers can't see that they are making a huge investment mistake now, then say good riddance to them because they are not the type of savvy investors that need to take MU higher.
Yes they do, he is now getting in the way of forward progress and not exciting the institutional investment community. Probably a nice guy but time to go ad the MU train is leaving him behind. If Einhorn and others want to do a service to MU, they should talk with the board about creating stock sizzle.
After listening to the entire CC I have come to the conclusion that MU top management either needs to significantly change the way they do CC's from now on, OR they need a change of speakers to create some excitement in their communication. MU has great numbers that they didn't even focus on, especially in the financial areas of the BS and cash flow. They could have created a true buying frenzy by highlighting these. Ron Foster needs to retire or be let go for a much more energetic financial pro. Foster has squandered some financial decision making recently and MU's cash flow has suffered for that. But his boring communication does not help MU's CC at all. MU should have announced how much debt would be retired and what the positive effects would be to both the balance sheet and income statement. A statement was made about convertible debt and Elpida pay down debt but it wasn't explained in a way that was clear and positive.
Forget share repurchases or dividends right now, pay down the debt to the point by at least 1/2 this year, and reap the benefits of less interest expense. Then consider share repurchases. Also, find a way to tap the Elpida cash that they say is not readily available probably due to foreign source taxing, etc.
MU has a great story and it is being left to analysts to skew, mis-state or get right. That should not be. It should be MU's IR dept and top management telling this great story in a sizzling way. Then you will see an added stock price premium to the existing stock price.
Current p/e with Mu at $24 is approx 14.5, forward with a $2.96 fye14 is approx 8. Today's beat will replace the q2 forecast of .76number with the actual of .85, so the fye14 will move up to a minimum of $3.05. If there are any upgrades to the q3 and q4 forecast numbers, then the fye14 will rise further.
But for simplicity, let's assume the $3.05 times a slightly higher p/e multiple, split the diff ( 14.5 + 8 = 22.5 divided by 2 = 11.25 ) and assume a worse 10 p/e. You can do the math as well as me. $3.05 times 10 = a minimum $30.50. That probably is worst case.
So, can anyone truly justify MU right now at anything below a hew 52 high? I can't. So let them sell the heck out of it at these levels, it is a matter of time before it goes UP, and the smarter institutions will start buying now at these levels knowing that a future return of 30% will be almost a sure thing. Now turn attention to the short positions in excess of 100 million shares. Are they so naive to think that they shouldn't start covering now before they will be more under water at some point soon enough.
The numbers don't lie and no reason to think that the story isn't now becoming very real and very solid. Any posts that claim above the low $30 range may be baseless unless the analysts really start upping the numbers.
Time is on the longer term side.
A few things. Free cash flow seems to have increased, and balance sheet cash maybe at a point that MU can pay down $1 billion in debt. If they announce that or close to it in the CC , analysts will love that and upgrade the price points. Now that MU has .77 and .85 non GAAP, all they need to do is .69 on average for the next 2 quarters and they will have $3 for FYE14, and if actuals are higher, then this stock cannot stay below the high $20's to low $30 for long.
So sell whoever wants to, it is in the bag for higher prices soon. They are proving they have done it.
and to add, because I am not sure, I have halted all my trading on MU since yesterday and won't trade until the dust settles, hopefully Monday/Tuesday. This may be a very wild ride tomorrow.
My opinion is that if the ER is a beat, and there is no concerns on the CC regarding any forward guidance, it should be closing around the $26 area. That is based purely on fundamentals. However, because I am not sure whether there will be a short squeeze, or a major sell program based on the sell on the news potential, I am truly not sure on this. I feel that there could be a 10% swing one way or another. My rational thought says higher, but as you know, rational thoughts can be overtaken by emotion on any given day, and tomorrow will be no exception. But I don't feel, and this is just my opinion, that MM's may be able to control the volume/price ( just for tomorrow ) if it is a 75 million share day or higher.
Posted under XQ's thread, I asked you the following
"Then just give your price prediction for where you think MU will close tomorrow. I asked XQ the same question,.... Let's assume for discussion sake that the ER beats the street and no bad news on guidance. So, based on your trading knowledge, and the available information, what do you feel. Don't wait until tomorrow to answer as I have given you the assumption that "ER tonight beats the street and no bad news on guidance".
You may be right or wrong, but it would be interesting to get your perspective.
If you want to be credible on this board, just post an answer.
personally, not a small options player, in the hundreds on average. Similar to you, my strategy works too. We might disagree on some aspects of your OP/MOP theory but heck, it works for you, and it works for me. Best to you XQ. I still haven't gotten a reply to that stockgirl as to what she feels that MU will close at tomorrow, per her posts of stock prediction capability. I know she reads the posts, so we shall see. You predicted just under $23 for tomorrow's close. Time will tell. Bad market day so far.
Well, all eyes will be watching to see if this theory pans out tomorrow by the close. Volume should be heavier and maybe the MM's won't have the firepower to pin the price one way or another.
Time will tell.
Even though I asked you a question, you seemed to have answered it here. Based on what you feel today, you feel that MU will close tomorrow just under $23. No more squirming XQ, lol. Just joshing you here. I also just asked stockgirl to commit to a number. I will see if she responds.