A couple of highlights:
- product gross margins (GAAP) were -61%
- the company may issue stock down here ($9.25 in the aftermarket) despite declining Samsung's offer in the $20s
I'm not saying that Sandisk did anything wrong (other than not accepting Samsung's offer), this is what a semi down cycle looks like.
What really stinks about semiconductor investing in this decade is that you get all of the pain of the downside with little of the euphoria, end zone dances, obscene margins and multiple expansion of the upside.
Semi cycles tend to bottom when the commodity trades for a period below the actual cash cost of production (like right here). I'm hearing that the royalty portfolio for Sandisk is worth $6 - 8 per share so the stock will be a buy in the next few months if Samsung doesn't buy it first.