I'm on the same page as you on almost every point you make. Why I posted about the Reuters article (Yahoo does not allow posting the link) is because the reporter said he was confidentially told by a GS source that this conference was different than their past conferences and was called the "First" because at this conference GS is now advising private-equity firms who want to be buyers of companies not just advisors to companies looking for M&A or buyers of their debt.
I feel there is a huge difference between being the Agent for the buyer, as being the Agent for the seller. The attendees at the event and GS's goals for the event is what makes the conference different and perhaps very important to Amkor investors. Also that GS did not "publicly" announce the real aim of the conference or the changes in their internal business plans involving M&A, and Amkor's involvement (putting themselves out there for consideration by private-equity firms looking for acquisitions) makes me think (and hope) that Amkor's management may be putting more emphasis on enacting a Kim end game. If my reading is near to being on target Amkor's management would have to have know and agreed with GS's outline for how they would price a company that could make a deal possible for the PE firms GS represent, before they were a participant. This could be a sign that Kim has agreed to a lower selling price. If it is, it is huge change, as you said and many of us have seen in news articles that reported that Kim's high price has always been the problem to an Amkor sale ever since they sold EB. Just my view and with perhaps a degree of wishful thinking.
Goldman's release says, "is hosting its first ever leveraged finance conference next week as the Wall Street bank tries to strength its position in debt underwriting and looks for new growth." When I read the release it seems what is new is that Goldman is expanding their banking role in buy-outs and are now also acting as advisors to the companies looking to sell. They say they are focusing on leverage buy-out firms as potential buyers at the conference. Their aim is to "broker" the deal then finance it.
Most Amkor investors have read news articles saying that they have been in discussions with potential buyers every since the Kims sold Electronic Boutique but from what little information has been released Kim's price was always too high to put a deal together. Amkor management has always dodged any question during CCs about their being for sale with answers to those kind of questions by talking about their purchases of others smaller OSATs. To me this very public announcement is a big departure from that, this says that the for sale sign is in the front yard! I am hoping also that this shows there could be some more flexibility on Kim's price in that Goldman is more involved, if they are acting as Amkor's advisors. It makes sense to me that Goldman would not be spending time, money and effort if they felt that Kim's price was too high to make a deal possible.
AMKR management just announced that they are presenting at Goldman's Conference in California. This looks like Amkor is putting itself up for sale to the private-equity firms. When you read the Goldman announcement of the goals of the conference. It says, "it is for banks to drum up business, because they get clients and bankers in the same place to network, socialize and discuss potential deals. It goes on to say deals typically involve private-equity firms know as sponsors, using a lot of debt to buy companies with the goal of reselling them for a profit. Goldman usually acts as an advisor to companies being sold in these deals, rather than to the buyers."
The article goes on to tell of recent deals Goldman has been involved in: MultiPlan at 7.5 billion and SolarWinds at 4.5 billion.
Unless there is something I'm not looking at correctly, Amkor is looking for a buyer. They aren't going there to buy some other company.
I always get a chuckle from your posts but usually think you go a bit too far but if you are correct that big pay raises are coming you are not only funny but right on the mark. Pay increases MUST be for performance as measured by earnings and share price growth. I hope the funds that hold large amount of shares agree with that and make their opinions know to management too. Pay raises when earning are forecasted to be negative are outrageous!
They just issued an updated 13 D/A, an ownership filing for the Kim Family. It brakes down all the shares to all the family members and their trusts that hold shares in Amkor. The most important numbers are that they own 137,9777,030 of the total shares or 58%. Some of the shares are non-voting or to be voted in a neutral manner. Their total voting shares account for 41.6% of the total. They have for years said in the Annual Report that management can control the outcome of any vote, on any issue, including the sale of the company.
When people post that this is a private company run as a public one, they are probably right, But I like the fact that management has such a commitment to the success of the company. It not just a job, it represents a lifetime of work and a huge part of their family wealth. But as I have posted before, in that they have this huge investment but only receive a low level of return, I sure wish I knew the plan for how they are going to generate a proper return on their investment.
Not that I’m someone that believes that all business cycles repeat themselves exactly. Buying a stock based on the past price per share chart is one of the best ways I can think of to lose money as an investor. The semi industry is cyclic, we all have been told that but many semi investors had hopes that the oversupply boom and bust days were behind us and the industry had improved understanding of inventory control and forward market demand. 2015 showed us that was wishful thinking. If we except the view that the 2015 downturn was mainly the result of poor inventory control by semi buyers, we can look back to the 2009 downturn as a similar example. Amkor’s revenue in 2010 jumped 35% compared to 2009, could we see the same kind of increase in 2016 (without including J-Devices) following the 2015 drop? But could that also be another example of wishful thinking? There has been a lot of changes in the world in the past six years. I hope we will see at least a good portion of that level of increase as the supply chain gets back to improved balance. The Amkor current raising share price and very high TTM P/E is saying the market's view for 2016 is that much better times are ahead. I hope it is right! If it is, Amkor's increased manufacturing capacity should be a great call.
On line analyst as a group are the last ones to call a change in any industry (up or down,) let alone the semi industry which is one of the most difficult to predict. Almost all analyst mimic what CEOs say at the latest quarterly report. Look at most of their earnings price targets, its the mid point of the company forecast. You will always be at least one quarter behind the market if you are making investments based on internet analyst projections and not doing the best in-depth review you can do on a company and its industry. Its not easy but today there is a huge amount of great information available to the individual investor who will spend the time.
I had hopes for Global when Kelley came on board, his having worked for them in the past but with Amkor building K5 and not building in New York state that ended most of my hopes for a tie-up with them and then as you said the oil price fall put an end to all hopes. With the QCOM (Amkor largest customer) news of their regaining the Samsung business and when the semi market rebounds in H2 or 2017 perhaps the market will push Amkor up to $14 if they see them working of the debt. If that could happen the Chinese might look at a 40% premium on the share price and get close to the 6 billion price that I think could be in the ball park to get Kim's OK for a sale. That's why it is exciting being a share holder, you can always dream big!
How could they take over a company when one family control 2/3 of the shares? If someone wanted to buy its only with Kim's approval, at his price.