ATI Hostile stock takeover?

[trinibwoy]

Nah I thought Nvidia came out of Taiwan's "semiconductor highway."

Oh ok.

 

[thegrommit]

[EDIT]

nm. Just checked and Nvidia is an american company. However, I wasn't aware that our monopoly laws affected american companies when they buy foreign companies. In this case, ATI being canadian.

ATI is also listed on the NASDAQ and has a physical presence in California. IANAL, but the original Sherman Act of 1890 does include this:

Sec. 3. Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia, or with foreign nations, or between the District of Columbia and any State or States or foreign nations, is hereby declared illegal.

 

[digitalwanderer]

I think the bump in their stock prices is part of a buy back plan, I don't think there is any hostile take over.

 

[Farid]

After XB360 launch, does MS give a rats @ss what happens to ATI so far as impact on XB? Why?

If the deal between MS and Ati is like the one Ati has with Nintendo, Ati will get a cut (~2 or 4%) with each software sold to the publisher. That's a lot of money, right here.

 

[Megadrive1988]

reaction to the subject title: Jesus, I hope not.

 

[epicstruggle]

That's five years out. Wouldn't you be better served at being able to pick best-of-breed three or four years down the road?

I think MS is already working on the next xbox now, as we speak. It might not have a big budget or alot of people behind it, but as they learn more about what sony has with their next gen product, MS will try to scale where they need to be 4-5 years from now. They best be working on something now and not latter. Anyways, im just rambling.

epic

 

[CMAN]

If it is a hostile takeover, then I doubt it would be by a major player. Most likely, it would be by a private group or a hedgefund. Think of what ATI could do if they were private and allowed to screw around and not worry about investor senitment.

 

[Ailuros]

ATI is too big as a company IMHO, to even think that a possible hostile takeover would be an easy and risk-free task.

 

[_xxx_]

ATI is too big as a company IMHO, to even think that a possible hostile takeover would be an easy and risk-free task.

I have to think of 3dfx here... if for whatever reason R5x0 should be crap, they'll be a takeover candidate very soon, no problem at all (but I hope not).

 

[Geeforcer]

I have to think of 3dfx here... if for whatever reason R5x0 should be crap, they'll be a takeover candidate very soon, no problem at all (but I hope not).

It's been said a million times now, but here it is again: If Nvidia made it through NV30, ATi will manage despite whatever issues there are with R520.

 

[ChrisRay]

I think theres a little confusion here. A hostile takeover isnt something supposively ATI could control in this sense. It's not about someone just buying the company outright. It's about someone taking a majority hold of the stock they have an opurtunity to end up with control of the company.

Usually the company founders start out with a majority of the stock. But they slowly sell it off for whatever reasons. If a certain company or a certain someone starts picking up this stock and ends up with the majority. They end up owning a majority of the company. This is not a similar situation to where 3dfx filed to be bankrupt and sold its assets to Nvidia. I mean it really depends on whos holding the majority of the stock right now. ((Which I admittedly have no idea as I really havent payed any attention to it)) Either way I still am quite dubious of this possibility.

Something thats worth looking over. Some preemptive measures to take to avoid it.
http://www.ehow.com/how_138822_defend-against-hostile.html

 

[PatrickL]

Theses rumors have same weight than the ones we saw about Nvidia when their shares dropped to $ 9.50.

 

[_xxx_]

I have to think of 3dfx here... if for whatever reason R5x0 should be crap, they'll be a takeover candidate very soon, no problem at all (but I hope not).

It's been said a million times now, but here it is again: If Nvidia made it through NV30, ATi will manage despite whatever issues there are with R520.

nV made it, 3dfx didn't in a very similar situation. Just saying that anything's possible.

 

[Bouncing Zabaglione Bros.]

nV made it, 3dfx didn't in a very similar situation. Just saying that anything's possible.

Not similar at all. Nvidia had big problems with one next-gen part which looked especially bad because their competitor put out a stunning alternative. Nvidia worked through it because their business is on a sound footing.

3DFX had problems with a next gen part, but also couldn't run their business. 3DFX didn't target OEMs, and drove all their previous OEM customers into the arms of their competitors by refusing to supply them with new chips, all the while spending money like water. Even at the end, the management incompetence screwed their own rescue deal.

People could see the writing on the wall at 3DFX - you just had to look at the large losses quarter after quarters. We saw none of that at Nvidia during the NV30 debacle, and we've not seen any of it at ATI just because the response to G70 is coming a few months down the line.

"Anything is possible" doesn't really mean anything unless you think about it in the context of what is likely. Otherwise I might as well prophesise the imminent doom of Nvidia due to a comet falling from the sky and destroying their offices and staff because "anything is possible", right?

 

[neliz]

"Anything is possible" doesn't really mean anything unless you think about it in the context of what is likely. Otherwise I might as well prophesise the imminent doom of Nvidia due to a comet falling from the sky and destroying their offices and staff because "anything is possible", right?

Is there a bank account where I can donate for that cause?

at the end of the year, both companies will be in a balance of power again. I do not ph34r

 

[_xxx_]

"Anything is possible" doesn't really mean anything unless you think about it in the context of what is likely. Otherwise I might as well prophesise the imminent doom of Nvidia due to a comet falling from the sky and destroying their offices and staff because "anything is possible", right?

I never said it's likely, just possible - be it a comet or whatever

 

[Demigod]

I think the bump in their stock prices is part of a buy back plan, I don't think there is any hostile take over.

I hope not. If it is its a great way to tell us stock holders that they are worried about their stock nose diving.

 

[karlotta]

I think the bump in their stock prices is part of a buy back plan, I don't think there is any hostile take over.

I hope not. If it is its a great way to tell us stock holders that they are worried about their stock nose diving.

Its common pratice. NVDA has done too. And if your a Stock holder YOU love it becuse it gets your stock up. Or gives you a out let to sell at the higher price. It makes your employe stock go up too better moral.

 

[BrynS]

I'm not well versed in the corporate and fiscal perculiarities of this potential situation, so please correct me where appropriate, but surely any company/individual(s)/entity trying to achieve a majority stake in the target company would need to convince some or many existing shareholders to part with their shares, assuming those launching the takeover were unable to acquire a majority position from their existing ownership of shares and/or purchase of available shares?

In the case of ATI, does anyone have a rough idea of the shareholder composition, i.e. are most of the shares owned by a small number of shareholders (e.g. company directors, investors, etc) with the remaining being held by a small number of low-volume private investors or is it mostly a large number of private investors or somewhere inbetween?

While ATI's share price has dropped significantly over the past few months (quite why to the extent it has I can't understand, as I wouldn't have thought a delay at the high-end [R520] and reasoned, decreasing gross margins over a few quarters with a conservative outlook, but a promise of higher growth would necessitate such decline?), surely any investor, with more than a short-term (1-2 quarters) view, being courted to sell their shares would recognise that the current dip is most likely just temporary (at least according to ATI) and that the company (like nVIDIA) is set to show significant growth and diversification over the next few years with commensurate benefit being transferred to investors. Why give that up for a short-term windfall on a stock price many seem to accept is highly undervalued?

Could anyone explain briefly how the market cap figures are arrived at? ATI currently has a market cap of $3.35 billion, whereas nVIDIA has a market cap of $4.81 billion, yet both have almost identical gross margins (although ATI noted in their last conference call that their margins are down, with their quarterly revenue growth down to 7.90% versus nVIDIA's 23.70%) while ATI's revenue (marginally) and net income (significantly) are higher than nVIDIA's. ATI's product portfolio also appears to be more diverse than nVIDIA's with considerable stength in notebooks and consumer products (HDTV's, handhelds, mobiles, etc) whereas nVIDIA's strength is in motherboards/IGP's and workstations, apart from both of their core reliance on discrete GPU's. I'm probably missing various things here, but I'm interested to know what justifies nVIDIA's large market cap advantage over ATI, assuming it hasn't been inflated by ATI's recent drop in share price/confidence?

Cheers,


BrynS

 

[Megadrive1988]

nV made it, 3dfx didn't in a very similar situation. Just saying that anything's possible.

Not similar at all. Nvidia had big problems with one next-gen part which looked especially bad because their competitor put out a stunning alternative. Nvidia worked through it because their business is on a sound footing.

3DFX had problems with a next gen part, but also couldn't run their business. 3DFX didn't target OEMs, and drove all their previous OEM customers into the arms of their competitors by refusing to supply them with new chips, all the while spending money like water. Even at the end, the management incompetence screwed their own rescue deal.

People could see the writing on the wall at 3DFX - you just had to look at the large losses quarter after quarters. We saw none of that at Nvidia during the NV30 debacle, and we've not seen any of it at ATI just because the response to G70 is coming a few months down the line.

"Anything is possible" doesn't really mean anything unless you think about it in the context of what is likely. Otherwise I might as well prophesise the imminent doom of Nvidia due to a comet falling from the sky and destroying their offices and staff because "anything is possible", right?

nice post. agreed.