You have to be made of stern stuff to drive around in a car with Famous Potatoes on the numberplate, and Idaho residents have been known to get their cars registered out-of-state so that they carry a less down-to-earth message. They’re made of stern stuff at Micron Technology Inc all right – the company, with its memory chip plants firmly planted among fields of more conventional plants that will someday wind up as chips too – has had to take more than its share of derision, not only over its unlikely down home location, but also over its Quixotic persistence in continuing to fabricate memory chips when the US majors were dropping the things like hot pototatoes. Now Micron is bearing up under another burden: its equally unconventional backer, pototo processing king J R Simplot, who not surprisingly calls his empire J R Simplot Co, has taken it into his head to offer his potato processors a sure bet: buy shares in Micron Technology at prices up to $25, and he’ll make good on any losses they may incur. He has set 800,000 shares as the limit under his plan, and is even promising to cover the debt servicing charges for any employee rash enough to buy on credit, if after the charges, the employee is down on the deal. The only downside is that the guarantee can be terminated at 15 days’ notice, and employees may be barred from all selling at once. Nevertheless, it looks like a reasonable deal, and Mr Simplot – who sits on the board of the Boise company – is doing it as an employee incentive and because he believes that at $18.875, Micro shares – he is the biggest shareholder – are undervalued, and he wants to get the price moving. It all seems to be legal, so why is Micron unhappy? According to the Wall Street Journal, Micron, in which Amstrad Plc is now a substantial investor, has for years been plagued by professional bears who sell the stock short in the expectation that it is heading south – and Mr Simplot’s guarantee is simply perpetuating that flaky, high-risk image.
