CHIPBAIL (03.13.09)

They do not have to get the bailout, just apply for it?
Given their recent financial problems because of the economy and poor sales, sounds like a LONG to me.

I did some reading on these companies, and I would half to agree, a bailout application seems likely. The economy is on a boast right now to, stock market wise, so if the are going to do it, it will be soon before it is no longer an option. Even if things continue up for the stock market it still does't change there debt, that is what is sinking them right now. This will probably close long, and probably fairly soon too.

This actually looks darn short if you look at their balance sheet. You can check it out at finance.yahoo.com/q/bs?s=mu&annual. This is for August 28 (the most recent I can find for free on the web), but their January quarterly filed with the SEC shows a company suffering losses, but nothing like the cesspool the auto makers are in.

In January they reported having $1.025 billion in cash and equivalents, $1.032 billion in receivables, $883 million in inventories, and some other stuff totalling to $3.037 billion in current assets (assets that can be turned into cash in a relatively short time), with total assets of over $12 billion.

Their current liablilities (what they owe that has to be paid in the short term) amounts to $1.635 billion, and their total liabilities (including long-term debt) comes to $4.387 billion.

So in the near term, they have 3 billion dollars in assets that can be turned to cash. They have only $1.6 billion in short term debt.

Now, how receptive do you think the government will be to a company that says "we need you to loan us money because we only have a $1.4 billion cushion"? (remember, this is a company that only owes $4.87 billion TOTAL... it would be like pleading poverty because you owe $487,000 on your mortgage and debt, while only having $140,000 in the bank).

Now the quarterly for January also shows they lost $700 million over the last quarter. That's why they're shutting down unprofitable plants and shedding workforce.

But they're not likely to be asking for "bailout" money like the auto manufacturers. Micron's short term existence isn't in question. It's their long-term survival they're dealing with, and that's why they're closing plants and letting people go.

They ARE, however, asking for economic stimulus grants to use the plants that they're shutting down.

idahostatesman.com/business/story/696799.html

Micron wants stimulus bucks to convert these plants to manufacture solar panels and LED lighting. But this is NOT bailout money. Bailout means "Save me, I need money to survive!". These grants are "Give me money to provide new products and create jobs!"

This prop is a huge short. Micron has a strong balance sheet now and enough cash to weather a short storm, and is taking action to cut its losses while exploring other business avenues.

I'm not saying it's a great long-term stock pick in real life, but it's chances of needing a bailout by September is

short, short, short.

This actually looks darn short if you look at their balance sheet. You can check it out at finance.yahoo.com/q/bs?s=mu&annual. This is for August 28 (the most recent I can find for free on the web), but their January quarterly filed with the SEC shows a company suffering losses, but nothing like the cesspool the auto makers are in.

In January they reported having $1.025 billion in cash and equivalents, $1.032 billion in receivables, $883 million in inventories, and some other stuff totalling to $3.037 billion in current assets (assets that can be turned into cash in a relatively short time), with total assets of over $12 billion.

Their current liablilities (what they owe that has to be paid in the short term) amounts to $1.635 billion, and their total liabilities (including long-term debt) comes to $4.387 billion.

So in the near term, they have 3 billion dollars in assets that can be turned to cash. They have only $1.6 billion in short term debt.

Now, how receptive do you think the government will be to a company that says "we need you to loan us money because we only have a $1.4 billion cushion"? (remember, this is a company that only owes $4.87 billion TOTAL... it would be like pleading poverty because you owe $487,000 on your mortgage and debt, while only having $140,000 in the bank).

Now the quarterly for January also shows they lost $700 million over the last quarter. That's why they're shutting down unprofitable plants and shedding workforce.

But they're not likely to be asking for "bailout" money like the auto manufacturers. Micron's short term existence isn't in question. It's their long-term survival they're dealing with, and that's why they're closing plants and letting people go.

They ARE, however, asking for economic stimulus grants to use the plants that they're shutting down.

idahostatesman.com/business/story/696799.html

Micron wants stimulus bucks to convert these plants to manufacture solar panels and LED lighting. But this is NOT bailout money. Bailout means "Save me, I need money to survive!". These grants are "Give me money to provide new products and create jobs!"

This prop is a huge short. Micron has a strong balance sheet now and enough cash to weather a short storm, and is taking action to cut its losses while exploring other business avenues.

I'm not saying it's a great long-term stock pick in real life, but it's chances of needing a bailout by September is

short, short, short.

That is a lot of fancie wrighting, but to get right down to it, just by taking money that is in the stimulas package is a bail out. I understand what you are saying about them being financialy strong because they have assetts they can liquidate, but only if there are buyers. Not a lot of buyers in the market right now, the same goes for there inventory, they have to be able to move it. It makes them no money sitting in a wharehouse.

Cash and equivalents and accounts receivable are considered to be the same as cash. Sure, if you're in a biz with a lot of deadbeats your receivables might not be that solid, but manufacturers who use semiconductors are usually pretty good about paying their suppliers.

As for their inventory, they ARE selling stuff, and they need to keep some on hand. But it's not like their business has evaporated.

And finally, the stimulus money is not bailout money. Bailouts go to sorry cases like the auto industry. The stimulus money is going to cities, states, and companies to create jobs. It's not money to pay off debts and prop up foundering companies.

There is no economic reason for the government to bail out a technology company. If Micron were to fall on hard times (worse than what they may be experiencing now) they could file bankruptcy; the company does not disappear it just gets recapitalized and re-emerges with less debt and different owners. Happens all the time.

Only a company that is perceived to have too much of an influence on the U.S. economy would be offered a bailout, hence AIG and the automakers. AIG was a money issue; too many other companies had assets backed by AIG derivative assets that if AIG failed, losses at the other companies would rack up dragging them down as well. The automakers were a jobs issue; if one or all of the big three failed there would be a trickle down effect to all the parts suppliers and that would lead to more layoffs. Both of these possibilities were percieved to be threats to the U.S. economy as a whole.

There is no way Micron gets any money from the U.S. government under any circumstance, bailout or stimulus.

Well, there is currently a Class Action suit against Micron and a few other chip makers for price fixing

If they lose the suit and had to reimburse the purchasers of the chips the difference. They might have to fork up the difference

Athens,Ga

And keep in mind how the prop reads, they only have to apply for a bail out. If that happens and they are told to pound sand then the prop would be satisfied and pay out.

The price-fixing case is unlikely to have any effect whatsoever. It was filed in 2006 and is still just sitting around and has not gone forward. Further, even if it WERE to come to a head this summer, it would still be appealed. lawsuit won't tap them until after all legal avenues have been exhausted.

And let's not forget that a government bailout is NOT in a company's best interest. It means taking on big loans, with the government sticking their noses into the books all the time and setting conditions most businesses don't want to deal with. Why do you think Ford stayed out of the auto bailouts?

On top of that, Micron is considered a front runner as a partner in a consolidated chip-maker business Taiwan is hoping to put together.

ecommercetimes.com/rsstory/66408.html?wlc=1237350395

If Micron came into the mix, they would not be applying for bailout money from either the U.S. OR Taiwan... they'd walk into it after the fact.