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Seagate Technology Public Limited Company Message Board

v1kes_won 10 posts  |  Last Activity: May 23, 2016 8:25 AM Member since: Jul 28, 2003
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  • Reply to


    by vsormanti May 20, 2016 9:15 AM
    v1kes_won v1kes_won May 23, 2016 8:25 AM Flag

    While their are certainly legitimate concerns over the SNDK acquisition: High price, ability of SNDK to ramp 3D NAND flash, WDC debt load and flash price stability, three points should be focused on:

    1. Initial pro forma estimates for WDC/SNDK by three or four Analysts were in the $7.50 to $8.00 range or 40% above the consensus estimate for FY16. Put a P/E of 10 to 12 on these estimates and compare to current share price. Let's see how these estimates change after Thursday's call?

    2. STX is struggling with its non-HDD recent acquisitions, no revenue growth since 1QFY15. Combine that with STX's greater exposure to enterprise HDDs, which are under attack by SSDs, and STX faces a more challenging situation than WDC as evidenced by missing three of its last four forecasts. Since FY14, STX earnings are down 65% versus a 33% drop for WDC.

    3. No one has considered what the internal supply of flash means to WDC in terms of this competition with STX in the SSD market. With flash comprising 70% to 80% of the bill-of-materials of a SSD, WDC will have a significant cost advantage over STX in SSDs which should lead to a significant, long-term share advantage in this marketplace.

  • Reply to

    Banc America analyst

    by carlicon May 13, 2016 9:06 AM
    v1kes_won v1kes_won May 16, 2016 2:39 PM Flag

    One thing most of the bean counters fail to take into account is the potential WDC share gain from STX in SSD market that WDC could obtain by having an internal supply of NAND flash.

  • Reply to

    Banc America analyst

    by carlicon May 13, 2016 9:06 AM
    v1kes_won v1kes_won May 16, 2016 2:37 PM Flag

    Remember the large number of short term puts sold about two weeks before BofA started STX at sell.

  • Reply to

    Banc America analyst

    by carlicon May 13, 2016 9:06 AM
    v1kes_won v1kes_won May 16, 2016 2:35 PM Flag

    NAND Flash gross margins are around low-to-mid 40%, NAND comprises 70-80% of the SSD bill of materials.

    Assume WDC sells $1 B in SSDs, divide that by SSD ASP to estimate # of units and take number of units x average SSD capacity to get total capacity shipped. Divide total capacity shipped by average NAND flash chip capacity to get estimate for number of chips WDC will require from SNDK.

  • v1kes_won v1kes_won May 6, 2016 7:00 AM Flag

    I believe a couple of Analysts previously had a long term pro forma estimate of $7.50-$8.00/share.

    However, the interest rates on the loans came in much higher than expected, but WDC now sees greater cost savings.

  • Reply to


    by vsormanti Apr 12, 2016 9:04 AM
    v1kes_won v1kes_won Apr 13, 2016 11:04 AM Flag

    Gartner: 3/24/16

    "The worldwide PC market (desk-based PCs, notebooks and premium ultramobiles) will decline again in 2016, with units falling 1.5% to 284.3 million from 288.6 million in 2015, but will stabilize in 2017 as the impact of price increases mitigates"

  • Reply to

    Board takeover

    by vsormanti Mar 22, 2016 12:49 PM
    v1kes_won v1kes_won Mar 24, 2016 12:57 PM Flag

    "If you don't know how to do basic math"

    That makes two of us.

    So $300 vs $50 is a just a tad higher for a $450 PC?????


    Hey Einstein, couple more questions:

    1. If terms of gross profit, what is the difference between one cloud drive and one laptop HDD?
    2. What is the projected growth rate of cloud storage that mainly employs HDDs?
    3. What were STX's non-HDD sales last quarter?

    Thanks for the good laugh!

  • Reply to

    Board takeover

    by vsormanti Mar 22, 2016 12:49 PM
    v1kes_won v1kes_won Mar 24, 2016 8:38 AM Flag

    "it really makes little sense to use HDD. You can get 1T SSD for about $300"


    FYI, STX 1 TB HDD prices are $50-$60.

    "I will go for NAS if I need more storage"

    and on what types of devices does NAS use to store info?

    "SSD will become even cheaper when Hynix/Micron/Toshiba ramp the 3D NAND in the next few months"

    It took Intel 6 years develops to develop 3D FinFETs and the costs are still high compared to 28nm planar chips. FYI, semi logic manufacturers still adding 28nm capacity for planar chips since their YIELDS still make them cost competitive versus 3D chips.

    Congrats, you posted a triple crown of misinformation.

  • v1kes_won v1kes_won Mar 4, 2016 6:23 PM Flag

    SNDK net cash is $1.86 B push I believe there is a $500 M payment due Toshiba shortly.

  • Reasons why WDC Shareholders should vote yes:

    1. Storage is expected to grow at 15% CAGR over next three years.
    2. Deal will make WDC #1 in overall storage and #2 in solid state storage
    3. Up to 80% of the SSD bill-of-materials is for NAND flash, which has 40% gross margins. So the internal supply of NAND flash will alone save WDC $250 M on $1.25 B in SSD sales.
    4. SNDK doubles addressable market for WDC
    5. As SSDs increase in share, annual synergistic savings are expected to grow from $0.5 B to $1.1 B by 2020
    6. Expands margins, combined entity should also receive higher earnings multiples than WDC alone
    7. Consensus FY17 EPS for Western Digital alone is $6.50 on $12.3 B in sales. From WDC most recent info on deal WDC/SNDK: sales of $19 B with 33% margins, 15% tax rate yields EPS of $8.65 after MOFCOM and SNDK synergistic savings. Employing an EPS multiple range of 9 to 12, you get $78 to $104 price target.
    8. Gives WDC fundamental cost advantage over STX in SSD market which should lead to share gain. A KEY POINT MOST ANALysts are ignoring.
    9. 44% of WDC shareholders own SNDK stock and will benefit from the deal.

    Rebuttal of paranoia points:

    1. Deal is pricey at $16 B, however just one SSD fab runs $15 B.
    2. SNDK's ability to ramp 3D NAND flash cost effectively. SNDK will begin 3D NAND flash production early this year.
    3. Stability of NAND flash pricing. Gartner data shows NAND flash coming back into supply/demand balance in 2016. A $15 B/fab, how many firms can continue to add capacity?
    4. Doesn't this pit WDC directly against Samsung? How did Samsung do in HDD business?
    5. Commitment of Toshiba to business. Memory is Toshiba's most profitable business with 27% operating margins

    Instead of considering the cost advantage WDC will have over STX and its implications in the storage market too many PUTZ are lamenting the deal price, SNDK's decline in earnings, and flash price erosion. Hello, WDC is buying SNDK to use its flash in its drives.

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