Jan 31 2007
My bet on SanDisk Corp. (Nasdaq: SNDK, stock) didn’t take off after the earning announcement today. Though the sales surge by 55%, it reported a loss due to massive charges related to its acquisition of Israeli flash memory maker M-Systems. Net loss for the forth-quarter was $35.1 million, or 17 cents per share, down from a profit of $133.9 million, or 68 cents per share, in the fourth quarter of 2005.
The company’s loss includes $186 million charge to acquire in-process technology, $31 million for stock-based 
compensation, $20 million in other acquisition charges, and $10 million in income taxes related to those charges. Revenue for the quarter surged 55 percent to $1.16 billion from $750.6 million in 2005. The company’s sales included results from its M-Systems acquisition, which SanDisk closed in November 2006.
compensation, $20 million in other acquisition charges, and $10 million in income taxes related to those charges. Revenue for the quarter surged 55 percent to $1.16 billion from $750.6 million in 2005. The company’s sales included results from its M-Systems acquisition, which SanDisk closed in November 2006.If SanDisk exclude the above charges, it would have earned 87 cents a share, better than Wall Street’s expectation of 72 cents. So, the decline stock price over the last 3 months should have taken the acquisition costs into consideration. SanDisk also said average price per megabyte of its NAND flash fell 17% is within its’ projected forecast. But I think when the company cautioned that there is an oversupply of NAND flash, the investors decided to dump the shares causing the stock to slide by 10% to $38.30 from closing of $42.83.
So what’s the next step to salvage my trade? Depending on the chart pattern for the first 45 minutes trading when the stock market open today, I’ll decide whether to reverse my earlier trade or convert it into spread or give SanDisk some space to breathe and investors to digest the figures. Furthermore it’s very close to the 52-week support level at $ 37.34.
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January 31st, 2007 by financetwitter
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