SanDisk and Samsung: Another One Bites the Dust

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Stop me if you've heard this one before.

A large company sees an opportunistic shot at making a strategic acquisition at an attractive price point. Taking advantage of its target's falling share price, the groom-to-be goes public with an unsolicited offer that is a reasonable premium to the current price. The bride-to-be shakes its head, holding out for a better offer. The sweetened counter never arrives, and the share price of the target falls as the market and/or fundamentals continue to erode. The once inspired buyer walks away, sending the picky target's stock falling even more.

It's happening to SanDisk (Nasdaq: SNDK) this morning. The flash memory maker opened 29% lower after Samsung (OTC BB: SSNLF.PK) announced that it was officially walking away from its $26-a-share buyout offer that SanDisk shot down.

Sounds familiar, doesn't it? It's a lot like when video game giant Electronic Arts (Nasdaq: ERTS) walked away from Take-Two Interactive (Nasdaq: TTWO) after the Grand Theft Auto publisher dismissed a similarly priced $26 offer. In terms of crumbling fundamentals, this is an even closer fit to Microhoo, with SanDisk playing the part of Yahoo! (Nasdaq: YHOO) and Samsung slapping on Microsoft's (Nasdaq: MSFT) sweaty suit.

Samsung isn't holding back as it walks away. Turning kiss-and-tell into diss-and-yell, it's letting the world know what a mess SanDisk has become.

"Your surprise announcements of a quarter-billion dollar operating loss, a hurried renegotiation of your relationship with Toshiba and major job losses across your organization all point to a considerable increase in your risk profile and a material deterioration in value, both on a stand-alone basis as well as to Samsung," Samsung writes in its kiss-off letter.

It is everything short of teasing it about its personal hygiene or letting it know that it can keep the tube of toothpaste that it's leaving behind.

Samsung is right. SanDisk's earnings report was a disaster. It makes you wonder what SanDisk was thinking in playing hard to get last month. It sort of puts this month's half-baked slotMusic initiative in its proper perspective.

SanDisk is getting kicked to the curb, but it has company. If it plays nice, maybe it can join Yahoo!, Take-Two, and even Circuit City (NYSE: CC) around the homeless bonfire to stay warm.

SanDisk has had a rough month:

• SanDisk's report was a dud.
• Investors will want to know why it walked away from $26 a share last month.
• No, I'm not a fan of slotMusic.
• What are you waiting for? Here is your shot to score big.