Backdoor reality check....

Look here:
http://www.forbes.com/2008/12/09/inf...arkets-equity-
cx_ll_1208markets06.html?partner=yahootix

Infineon makes the chips for the iPhones. This morning, they've dropped to
$1/share. If the world were buying iPhones and iPods like the fanbois
dream they are, Infineon stock would be HOT, not about to be delisted....

In reality, in spite of the usual hype, sales MUST be way off, like the
rest of the economy. There'd be no other explanation if Infineon chips
were in heavy demand to make iPhones......Infineon was over $8/share in
September.

---

› See More: Backdoor reality check....

Larry <[email protected]> wrote in
news:[email protected]:

> Look here:
> http://www.forbes.com/2008/12/09/inf...ments-markets-
equ
> ity- cx_ll_1208markets06.html?partner=yahootix
>
> Infineon makes the chips for the iPhones. This morning, they've
> dropped to $1/share. If the world were buying iPhones and iPods like
> the fanbois dream they are, Infineon stock would be HOT, not about to
> be delisted....
>
> In reality, in spite of the usual hype, sales MUST be way off, like
> the rest of the economy. There'd be no other explanation if Infineon
> chips were in heavy demand to make iPhones......Infineon was over
> $8/share in September.
>
>

Now armed with the very dismal businesses of its chipmakers, you read
things in the press like:

"Our checks following Cyber Monday show stock outs of the iTouch at
Amazon, Target and Walmart (particularly the 16GB version) as well as
nanos and shuffles. We believe gaming (plus music & video) is emerging
as the killer app for the Touch platform due to its unique position in
the market (touch functionality, accelerometer/tilt user interface) and
a growing availability of inexpensive/free software. As highlighted in
Fig 1, we estimate the Touch platform (iTouch & iPhone) will exceed 22M
unit shipments in CY08 and represent 30% market share of portable gaming
devices."

This came from:
http://seekingalpha.com/article/1096...h-better-than-
apple?source=article_lb_articles

Hmm...let's check reality.....

I can't produce product fast enough to supply my outlets. My factories
are running full tilt, 3 shifts a day, 7 days a week trying to keep up
with the load. The shelves are empty and they're waiting in line for
the trucks to bring in more. My company is going to be VERY rich and
EVERYONE will be buying my stock like mad, pushing its price up, just
like the old days, right?

But wait....reality check.....

My stock that was once $200/share can't force itself over $100/share and
hold out above that line. Investors are not standing in line driving up
the price! My suppliers I'm buying all these chips and parts from
SHOULD ALSO be going bananas working 3 shifts to produce my parts.
Instead, they're laying off people and trying to avoid bankruptcy, their
stocks delisted from falling so far into the pits. Making all those
chips with Chinese slave labor SHOULD be making my stockholders filthy
rich....not wanting to dump the shares and lick their wounds.

Am I the only one here who thinks this reality shows someone is a liar?
Something is WAY wrong in Camelot.....

In article <[email protected]>, [email protected]
says...

> Am I the only one here who thinks this reality shows someone is a liar?
> Something is WAY wrong in Camelot.....
>
>

Larry - I think you're mistaking logic and rationality, for stock market
sentiment.

There are scores - probably hundreds - of companies who are currently
trading on the market at a market cap (number of issued shares x share
price) which is LESS than their cash reserves! Here on our Australian
market, we have companies from the largest end of the spectrum all the
way down to the tiny speccies who are in just that position. One that
I'm very familiar with has a current market cap of about $250 million.
They have $384 million in the bank. And that's not counting their
business and its assets. They have no debt.

Logic? I think not. So if Infineon shares are dirt cheap, but their
business is going well, then that could be seen as a buying opportunity
for those want shares, or a vulneability to a takeover by a bigger
predator.

It has absolutely NOTHING to do with how well their business is doing,
and EVERYTHING to do with silly market sentiment. The herd mentality.

--

NightStalker