As you know, Intel offerred $6 Billion in debt, most of which will be used for share repurchase.
Being that Intel made a pretty good amount of profit for Q4, $3.2 Billion operating income, and that they only used $1 Billion for share repurchase, it looks like Intel has used very little if any of the debt for repurchase so far. So my guess is, Intel could be very aggressive in the current quarter to repurchase shares. Especially now that the stock has dropped over 6% because of negative investor sentiment.
What do you think?
Could be a good buying opportunity short term at least.
Sentiment: Strong Buy
Intel Investor Relations replied to a question I asked about how they accomplished the Intel share repurchase. He indicated that they contract with a 3rd party and do not do the repurchasing themselves.
What you are looking for is the rules limiting open market share repurchases or SEC Rule 10b-18 .
"To come within the safe harbor the purchases must satisfy the Rule's manner, timing, price, and volume conditions. Failure to meet any one of the four conditions will disqualify the issuer's purchases from the safe harbor for the day."
some of the restrictrions
Rule restricts issuers from making repurchases that constitute the opening transaction in the security on a trading day, or that occur during the last 10 minutes before the scheduled close of trading. (10 minutes rather than 30 minute exclusion because Intel share float value is greater than $150mill and trades more than $1mill per day).
The purchase price cannot exceed the higher of the highest independent bid or the last independent transaction price.
The Rule limits the amount of securities an issuer may repurchase on the market on a single day to 25% of the four-week average daily trading volume in its shares (that is, the average daily trading volume during the four calendar weeks prior to the week in which the 10b-18 purchase is to be made). However, issuers are permitted to make one block purchase of its common stock per week outside of the volume restrictions.
I take it that the purpose of the rules is to forbid manipulations of the pps for the day. I wonder if JPM, GS and such have similar restrictions .. or do have only their 'analysis' as a manipulation tool?
meaning do you think that Intel negative analysts and their traditional downgrades in addition to their analysis have some 'other' entity shorting the stock at the same time they 'open their mouth' or is it suppose to be illegal?
I don't really have a good way to #$%$ the re-purchase program but I would assume Intel would be relatively aggressive given the hugely undervalued nature of the stock at this point.
But here's what I was thinking. I was thinking about the value of the company verses a year ago. Intel has built this huge state-of-the-art manufacturing capability over the last year. And in spite of having this huge capability the company is actually valued at a much lower level. This is to conclude that all of that manufacturing capability is not just worthless but much less than worthless. Intel made billions in the last year. And invested them wisely. They invested in the future. Yet the market has concluded that those billions added nothing to the value of the company.
Intel is so much stronger than they were a year ago. Their mobility roadmap is about to get a lot of traction. They have eliminated the power efficiency gap. And they continue to make huge investments in being even better prepared for the future. And yet the market has concluded that no value will ever come of any of it.
Intel is about to become the most competitive they have been in their history. They are strong in every aspect of the processor business. In some areas they are about to open up technology leads that the competition will never regain. And yet the market has concluded that no value will ever come of any of it.
Intel invested billions in R&D and continues to do so. And yet the market believes that no value will result from any of the R&D.
The market is simply wrong. They are stuck on the "PC is dead" mantra and are unable to get their heads around the fact that Intel has totally re-designed its business for the post-PC era. All because it takes time to develop and put in place state-of-the-art technology. And now that almost all of the heavy lifting is done and Intel is starting to implement the new strategy along with 22 and 14nm production, the market is the most incorrect and the most wrongheaded they have ever been about Intel and its prospects.
A blind man could see what is going to happen next. But a man in denial will never see. They have to be slapped upside the head. Repeatedly. But that's okay because Intel is going to slap all of them upside the head. Did they really think Otellini was blowing smoke when he said he thought Intel had already won? No, he simply has more facts at his disposal than the naysayers do. And he knows that the facts will speak for themselves shortly.
Intel began the slapping during the earnings call when Paul and Stacy refused to let the ill prepared and wrong thinking analysts perpetuate their myths. 2013 will be the year that Intel's post-PC strategy begins to leave victims in its wake.
2013 may start slow but it will end with a bang that will leave Intel's competitors wondering why they ever thought Intel wasn't one of the most dedicated and competitive companies on the planet.
Intel has prepared to resume it's role as the 500 lb gorilla of the technology world. I'd like to say that ARM had better quit running its mouth and get busy on fabrication. But it's too late. Intel has prepared to win. And now they will. ARM doesn't have enough time, money or technology to do anything about it...
Sentiment: Strong Buy
You said: "No, he simply has more facts at his disposal than the naysayers do."
And because of this, I have seen over the last 5 years, sell side analysts being very wrong many times over. It took a little time for Intel to take full advantage of its High K metal gate lead. But once they did, they reaped benefits that exceeded the expectations of the most positive analysts.
So if Intel thinks it's important to invest $3 Billion more in capex for 2013 than what analysts expected, then I'm sure Intel knows enough to be doing the right thing. That there is a huge line of customers very eager to use their porducts. Especially in the smartphone area.
Sentiment: Strong Buy
That's hilarious. Yahoo thinks the word "a ess ess e s s" (as in "to evaluate") is a dirty word because it has "a ess ess" in it. Even Microsoft could have improved the message boards better...