Sandisk Takes Down Wall St Warriors

Sandisk's (SNDK-NASDAQ) earnings report tonight might be overshadowed by the numbers coming out of VMWare and EMC Corp., but are never a dull affair given the earnings predictability, or lack thereof, at the company.

The stock has been annihilated, but expectations are not terribly high, and at least one shop is looking for in-line results:

We are expecting inline results and guide believing volumes offset drop in flash pricing. We think solid state drives and increased NAND in mobile phones will lead to incremental growth Avian Securities

There are more moving parts to this story than perhaps any other stock we have been involved with over the years. CEO Eli Harari's salad days are behind him as he tries to fend off rivals and deal with patent issues and increased industry capacity.

Legg Mason has been on quite a roll picking disasters to get involved with; their gigantic position in Sandisk as of September 30th is just another misstep for the firm. But less storied members of Wall Street have been crushed by the stock as well, including the aggressive retail brokers showcased in the season's Wall Street Warriors, which debuted just last week on MOJO channel.

Lance moved to New York to "get rich or die trying".

Lance: The turnover rate in this business, especially at a company like this, is like the turnover rate of a strip club.

Lance and his firm were working Sandisk hard in episode one, pitching via cold calls and trying to drum up interest.

Lance to client: The reason I am giving you a call this afternoon is a company called Sandisk corporation.

Lance to camera:Basically what I try to do is, just paint a pretty picture with the story.

Lance to client: Over the next couple of months we are creating a tremendous demand for flash based memory. Can you see that? Am I painting you a clear picture here?

Lance to camera: “ There is really no better feeling that getting a guy on the phone, that you really don’t know, and forcing some stock down his throat, and he ends up buying it. Thats what gets me going every day”

Sandisk was trading at $44 the day he was pitching it; the segment was likely filmed during the company’s earnings release in the fall.  With the stock trading at $25 going into earnings tonight, Lance is basically screwed.

As he said, “My future basically rests with Sandisk”

That is a dicey stock to bet the ranch on, Lance. A big move after tonight’s earnings might come too late to save Lance, or Legg Mason for that matter.

And that chart is anything but a pretty picture, no matter how you paint it.

Sandisk Two-Year Chart

Wall Street Warriors
Episode One
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