I was really hoping you worked out as my demigod. I mean I like Ashraf, but what does a guy with a math degree and a computer science degree know? Besides he doesn't have a cool moker like "Marco the great." I was really hoping that while flipping burgers the recently deceased cow would pass along vital stock information.
So, imagine if Marco had around $25K fo short Intel. His short position would be around $24.70 and his buyback position would be 23 cents higher. He was saying Intel would be down below $24 which would have netted him $700. Not too shabby for a day's work? Instead he would have been out $230 which would have been close to a week's take home pay.
Sorry Marco, the cows led you astray. I guess I'll have to listen to Ashraf instead.
And with Android.
This entire thing made me giggle. Microsoft couldn't wait to get into bed with ARM. Kinda like coming home to the wife who announces she wants an open marriage. The first thing she does is hook up with the pool boy. And after a few months she discovers that he's a grifter and impotent. Meanwhile the husband hooks up with Charlize Theron. The wife kicks the poolboy to the curb and yet the husband is off to Santa Barbra every few weekend with Charlize.
Hooking up with ARM was a lose-win strategy for Microsoft.
You know as well as i do that each conversion from ARM to Intel is from companies who have weighed the alternatives and selected the Intel roadmap. It's more than a loss of faith, it's a loss of long term revenue and yet another hole in the sinking pirate ship. BTW, when Microsoft spent nearly a billion dollars to promote ARM did you year any of us complain about the horrors of using profits derived from Intel sales to prop up the ARM product? We're talking about nearly the same amount of money. I don't it ever coming up. But you haven't made a post in the past week without bringing it up. And yes each new node from Intel is new ground that ARM may not be in for five or more years.
The similarities are between Intel and XBox is that arguably Intel isn't exactly ready for mobile. There are holes that need to filled in with out of house solutions. Microsoft didn't exactly have it's technology ready when it launched the XBox 360. Had they waited a couple of years to have its ducks lined up they may have saved the losing money upfront situation, while handing more business to the Sony Playstation.
Microsoft benefited from having the XBox placed in homes even at a loss. Intel is claiming it's market share now and like the XBox they'll figure out how to improve profitability in the future.
One interesting note, the new XBox One has a BOM lower than it's selling price. Each unit sold makes money for Microsoft. The similarities is that by now consumers have a library of game titles that more or less keep them loyal to one system. This is similar to socket loyalty The next update most likely won't be with a subsidy .
As someone mentioned a couple of years ago the easiest thing to do is stick with ARM. When people move over to Intel they do so because they believe in the long term roadmap of Intel and that it in their best interest to partner with Intel.
Paul Thurrott mentioned that back in 2003 he saw the first prototype of the XBox 360. It was on a rack the size of a refrigerator. They had a modeled prototype of the first white case. He couldn't believe that it would fit into the case. But it launched in 2005. The BOM was much higher than the selling price. Microsoft lost money on each console sold. To make matters worse after a while the units would overheat and a red ring of death would come up. Microsoft would pay to pick up the defective units, fix them, and ship them back.
This was a losing proposition for Microsoft for years. The royalties for resulting game sales didn't make up for the fact that Microsoft was bleeding money. And then after a while they turned it around and started making over $1 billion a year in XBox revenues.
Yes it's hard to draw a direct correlation between XBox and Intel's $1 billion payout. After all, XBox makes money on games and all Intel has is sales. My point is that sometimes you need to not be afraid to lose money upfront in order to make it back in the backend. The socket you help subsidize today in order to be priced competitively may not need it in the future if Intel gets it's economies of scale in line and can help fill out the SoC with in house technology.
Interesting, a lowly short order cook like marco has to educate y'all about stocks and manipulation.
And now you know why ARMH is at $50.
Yes, I read that article, It was exactly as you said, but it wasn't a bribe. Had it been the other way around you would have said it was just the cost of doing business. A "bribe" is an illegal activity as in calling up someone in charge of making the socket decision at a company and saying "There is a 7 series BMW sitting in the parking lot If you switch from ARM to Intel I'll leave the keys for it with your receptionist."
As to what I said about the A, B, C players and ARM money (from other non-smartphone, and tablet ARM revenues) used to replace ARM sockets. How is this wrong?
I like the way you stated this. Bailed out and validated. But when when Intel offers to pay for socket placements to be competitive this broke some imaginary moral and ethical code? They were perfectly fine running with the fantasy that Nvidia and Qualcom would be bailed out by Intel. Perhaps breaking Intel down to some Samsung deal where they make 14nm ARM processors for them at pennies on the dollar. The ARM zealots kept coming on here warning that Intel would make no money in mobile. Yes, if Intel was a simple FAB for QCOM and NVidia that would be true. But when they saw that Intel was picking off Altera and may make ARM chips outside of mobility and then paying down the upfront expenses for tablets SoCs to the extent that they would gain 40 million tablet sales in 2014 they had a cow. Suddenly the fantasy wasn't real. No Intel/ARM bailout for them, They have to do battle with the A7 and other Samsung SoC's with TMSC who is talking about 20nm and not really doing a super wonderful job supplying 28nm. Worse yet, in tablets, they'll see Intel on the streets. What the microbrewery meets kibbutz business model didn't work out against one of the best vertically integrated manufactures on the planet? How shocking!
Two weeks ago it was the proud talking point that "Intel has to open it's fabs in order to compete." The past week is the word "Bribes." The word is floating around from many different people. Kinda like one person came up with it as a talking point and the paid bloggers ran with it.
Someone was talking about half filled Intel 14nm fabs. Ashraf was having a field day with this guy. I'm looking forward to Ashraf's article about what other companies aside from smarthphone and tablet makers SoC providers could use 14nm technology either Intel or ARM. His point is that Intel may need to add on more capacity just to keep up with demand. I just think of all that great ARM profits Intel will reap because the other fabs are so far behind in their ecosystem. Some of that money will come back in the form of "bribes" to help switch sockets from ARM to Intel in tablet and smartphones.
The story was supposed to go that Intel was supposed to only get B and C players in mobile. With the so called bribes suddenly it makes sense for some large volume A players. That's why the ARM fans are #$%$. They didn't see this coming. ARM money used to replace ARM sockets.
Don't worry, TSMC 20nm ARM/64 is right around the corner. They figured out finfet and got the yield issues fixed. Just in time! Daniel Nenni is ready to take your order.
The only people who really care if the stock goes up or down tomorrow is a day trader. If you think you're right why don't you short Intel in the morning? Short 1000 shares and cover in the afternoon. Curious to see how you do. Maybe you'll make a few hundred dollars maybe you'll lose a thousand dollars. Anybody named Marco the great has to have something on the ball!
I wouldn't call Getanid61 stupid by any stretch of the imagination. I just think he underestimated Intel's ability and resolve to get into mobile. Intel was in this position before with RISC processors wanting to gain market share in servers back in the mid 90's. They were up against IBM and others at the time, much large competitors. Microsoft had NT for RISC servers. By 2001 they gave up and rolled both platforms of NT into Windows XP. For the next five years Apple swore that their slower RISC based PC's were faster than Intel. They gave up in 2006. The thing that the RISC server folks complained about was being outspent by Intel. On the Apple side they got tired of backing the losing horse all the time.
It's going to take more time to take the best in class leadership role in mobile. Maybe a couple of years. But it's looking like history is repeating. Intel is out to fill win designs and bring it's fabs up to 100% capacity profitably. I like hearing Getanid61 complain. It shows that the $1 Billion is well spent.
I'm seeing that as well but it could be one black swan event like problems in the middle east that could throw a wrench into things. I'm thinking that despite the bashers best efforts Intel's "dead money" story has gotten old. This alone may push the P/E up a few points. But i do see mild growth. A simple P/E growth of 2 points would bring the price up to the high 28's. 6% growth and a P/E of 15 would take the stock over $30. Thus a 30% growth the stock isn't unreasonable. I've also been noticing the lows Intel hit this past week was in the mid 23's. It used to be in the mid 21's. My guess is that Intel will spend the better part of next year running from 25 to 28. But a couple of better than expected quarters and a few more big design wins and it will be past 30.
"To bring your crystal ball into focus, INtel will be forced to open its fabs.
Result will be beyond positive and returns will trump x86 revenues."
The newest ARM talking point. Intel will wake up one day and say "Wow, we've been missing the boat with ARM, look at all these great revenues, who needs x86?" It will be ARM revenues to fund Intel "Bribes" as you like to call them. ARM is financing Intel's entrance into mobile and it's gain in market share in x86.
I am looking at the year 2014 in my crystal ball and I can't make heads or tails out of what's to come. We do have that long awaited XP upgrade but on the other hand there could be more economic woes and a possible Wall Street correction. If you predict gloom and doom Intel can go down to $16 a share, but the rest of the market would be in the toilet as well.
The rate of PC sales declines are slowing down and 2014 may be a turn around. If you believe consumers have replaced the PC with the tablet and smartphone then that would be a factor. If you think that there is a lot of pent up consumer demand and consumers will be buying more PCs then that would drive growth.
I'm a bit more positive about 2014 than Intel may be a the current time. But, lets run on their assumption that sales remain flat for 2014. In order for the stock to increase the multiplier needs to go up. This is caused by people believing that future returns will be greater than they are now. Keeping in mind that the working assumption is a flat 2014 do you think the P/E ratio will increase in 2014 driving the stock price up even without a dividend increase?
You clearly understand technology but the rebate programs have you a bit confused. A bribe would be be paying an engineer under the table for a design win. If you ever find Intel doing this I will be as outraged as you will be.
A rebate program works as follows. If you buy $1 million from Intel in 2014 we'll thank you. If you buy $1.2 million from Intel in 2015 you'll get 3% back. If you buy $1.5 million (or more) from Intel you'll get 5% back.
I suspect that Intel wants to get the ball rolling on its sales so it will discount the processors up front. It's like an introductory sale price. They do this to get design wins. If ARM was coming into an Intel dominated market they would do the same thing. The combination of great performance and an attractive low price is a bit much for most companies to turn down. Add to that help with advertising and the deal gets sweeter.
I can see why you're upset. People misjudge Intel all the time. The phone and tablet SoC is a nice market but at lower margins than Intel normally likes to work in. But as you eluded to so many times ARM was ramping up and Intel looked at the market in a couple of ways. First, enter it and make good returns. Second, gain a lead over ARMH that prevents it from hitting Intel's core business. Many have complained that Intel won't make its traditionally high margins in mobile. I think that they can do it, or at least come close. The real end game however is to neutralize the threat of ARM long term. Yes, ARM is winning for now, enjoy it while it lasts.
This looks like good news but I don't think it is. I am convinced that Intel told analysts that 2014 was going to be flat because they were setting them up. There would be one quarter where Intel would blow past expectations and leave institutional investors holding short positions covering at huge losses. This would break the $2 range play they love so much and take the stock out of the shackles. Now it looks like they are starting to wise up. Trust me, i love the stock going up but until they get massively screwed over they will keep the stock held down.
Best example of class warfare ever! Thank you for sharing this story. You should let us all know what restaurant this is so that Republicans keep their evil money away from it. Then again is this a safe place to eat? I mean what if you walk in with a Yankees T-shirt and the kitchen staff are die hard As fans? There is a duty of care and a breech of duty of care. Sure this doesn't mean much, but you would scream like hell if a nurse put a needle in your kids arm that came out of someone else's arm. I don't know how you feel this post advanced the Democrats position. It just makes me think that class warfare is deeper than we know.