The broker believes SNDK's NAND IP position is under threat as checks indicate that Hynix is currently ramping MLC aggressively. Micron-MU plans to sample MLC in Q1 with volume production in 2H06.
this doesn't make a whole lot of sense. SNDK's NAND IP position can't be under threat if Hynix is rampling MLC aggressively--an important part of their IP position consists of MLC patents which have already been upheld in court and which Samsung is already paying.
Additionally, the firm believes there is a possibility of a sharp ASP decline in Q1, given strong capacity ramps, and some slowing of MP3 & cell phone builds
Perhaps there is a possibility of a "sharp ASP decline in Q1," but if so, it flies in the face of what both companies and most non-affiliated research companies are saying.
Personally, I think it is a good trading and/or buying opp. But then, that is JMHO. And yes, I already own a full position in SNDK.
EDIT: one more thing--Deutsche Bank was on the underwriters for SFUN, which may be real reason for this. the underwriters have exercised their overallotment option, and stand to make a lot of money if they can hold SFUN up for awhile while they and their clients are flipping their stock.
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