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ChipMOS TECHNOLOGIES (Bermuda) LTD. Message Board

jaretwilson 11 posts  |  Last Activity: Aug 9, 2015 3:37 PM Member since: Oct 18, 2006
  • Reply to

    What does everyone want from Tower?

    by livininisrael Aug 9, 2015 8:33 AM
    jaretwilson jaretwilson Aug 9, 2015 3:37 PM Flag

    livininisrael, price to sales is meaningless in this context (and in most contexts). The gross margin is increasing every quarter, so there's no reason that the price to sales should stay at a constant level. Long term it's free cash flow that matters, not P/S.

    Also, you are constantly talking about dilution. Most of the dilution was from years ago when Tower was in much worse shape. For TPSCo they paid just $8 million in stock which is a very tiny amount of dilution for such a huge amount of new revenue and capacity. Now that they are in much better financial shape, large amounts of dilution are less likely, though there may still be some when they acquire more capacity.

  • Reply to

    OT to Sean...

    by jayand777 Jul 9, 2015 10:32 AM
    jaretwilson jaretwilson Jul 15, 2015 12:34 PM Flag

    Jay, a funny coincidence, after you mentioned it a friend was excitedly talking about the new release of the game and admitted he's spent hundreds of dollars on songs for the previous Rock Bands. I wonder what the revenue share is on that portion of the business.

  • Reply to

    Dead Silence

    by gsterling May 7, 2015 3:18 PM
    jaretwilson jaretwilson May 12, 2015 11:31 AM Flag

    That was an interesting call. Despite lower guidance, it was the first I can remember where there were no unhappy investors on the call, and SJ and SK seemed pretty confident about the long term.

  • Reply to

    SA article on MU by Jaret Wilson

    by jamcracker25 Apr 1, 2015 10:52 AM
    jaretwilson jaretwilson Apr 2, 2015 1:46 AM Flag

    Thanks. It was fun. It will be interesting tomorrow to see how the market reacts to guidance.

  • jaretwilson jaretwilson Mar 17, 2015 7:28 PM Flag

    Good spot Sean. I just noticed a huge number of July $15 calls changed hands today too. (2824, $3.45 last trade)

    Sentiment: Strong Buy

  • Reply to

    IMOS beat estimates by 50%

    by generator77 Mar 13, 2015 9:11 AM
    jaretwilson jaretwilson Mar 15, 2015 6:11 PM Flag

    Sean, I'm up for something if others are. June would be a fine time, though I may be busy on the 19th.

    Sentiment: Strong Buy

  • jaretwilson jaretwilson Mar 4, 2015 7:34 PM Flag

    livininisrael, having excess depreciation that you can use to eliminate taxes is a good thing, not a bad thing. It's a tax asset that you should be happy to have. As you said, there's no cash lost. Nothing is being "paid"...Tower is getting the ability to use its past expenditure to defray its current profits. Why should they pay taxes that they don't have to?

    I expect the Panasonic revenue to go on indefinitely. Panasonic would be throwing away money to put the business in another facility which they don't own 49% of.

    We are going in circles on these topics, so for my part I'm done.

  • jaretwilson jaretwilson Mar 3, 2015 11:30 AM Flag

    livininisrael, you don't "pay" depreciation, it's an accounting method that handles what you have already paid. In Tower's case it is covering a fab that they built, and whether that fab needs replacement at some point is irrelevant because now if they want a fab they can just start another new joint venture, or reopen Nishiwaki, etc., so they won't be likely to ever build another expensive fab like that. The old depreciation has no connection to the current business.

    Regarding the Panasonic deal, it won't end. Panasonic business won't disappear in a few years. They own 49% of the joint venture and won't be going to someone else with their business, even if there was someone similar to go to, which there isn't. If you owned 49% of a business, wouldn't it take a very good reason for you to go to a competitor rather than the one that you own almost half of and get a preferential rate from?

    Sentiment: Strong Buy

  • jaretwilson jaretwilson Mar 2, 2015 12:23 PM Flag

    livininisrael, let's say you won a restaurant in a poker game and it was built by a billionaire and it cost a billion dollars (it's very, very fancy). It is depreciating over 20 years which means it is losing $50 million due to depreciation per year, and according to GAAP it will have zero value after 20 years. The restaurant generates $1 million in cash per year, so each year you gain $1 million, but you have a GAAP loss of $49 million each year. After 20 years you have a restaurant that has a book value of $0 (but is still functioning and generating cash), you have $50 million in cash, and you have a net operating loss (which can be used as a tax write off) of $950 million. Would you say that you have to raise money to stay in business? Of course not, you have loads of money and no need for more, and no debt. Would you say that you've been losing money? By GAAP perhaps, but by any normal way of thinking you now have $50 million that you didn't have before, and you still have the restaurant, though it's a bit used, and you'll never have to pay taxes for the rest of your life with that write off of $950 million.

  • jaretwilson jaretwilson Mar 2, 2015 8:23 AM Flag

    In the near future, depending on your definition of the term near future. But really, who cares when? Why would they need to raise money? They are producing money, and they are unlikely to ever build a fab from scratch again because there are companies like Panasonic that will sell fabs for negligible amounts. They got Jazz, then Nishiwaki, then 3 TPSCo fabs, and all of those put together don't come to a fraction of what the 6" fab cost that's causing much of the depreciation.

  • jaretwilson jaretwilson Mar 1, 2015 3:11 PM Flag

    livininisrael,

    That's not correct. People use non-GAAP when it's a good measure (which it is for many companies). When it's not a good measure, they use free cash flow from operations. GAAP is a meaningless measure for Tower because the depreciation is a misleading number. Rather than caring about accounting rules, investors care about one thing: is the business generating cash or burning cash? This business is generating a lot of cash, and the deceptive depreciation number obscures that.

    Sentiment: Strong Buy

IMOS
18.56+1.44(+8.41%)Aug 28 4:00 PMEDT