NVIDIA and ATI Raising $500M - What For?

[Arun]

Dig, that gives me an idea...
Maybe the parties for the launches of the NV40 and R420? Talk about trying to impress the medias!


Uttar

 

[digitalwanderer]

Dig, that gives me an idea...
Maybe the parties for the launches of the NV40 and R420? Talk about trying to impress the medias!


Uttar

I need to go e-mail someone to see about an invite.... 8)

 

[THe_KELRaTH]

Dig, that gives me an idea...
Maybe the parties for the launches of the NV40 and R420? Talk about trying to impress the medias!


Uttar

I need to go e-mail someone to see about an invite.... 8)

Darn.. too late, you just missed out on the budget by 1... still... I'll send you some photos

 

[lost]

Guys, you're all way off base with this speculation.

I have it on good authority what the money is for, think "massive kegger"...

Kegger? I think Jen-Hsun Huang wants to stock up on whatever hallucinogenic that ATI was smoking to get the performance lead back.

 

[elroy]

Thanks for the link Dave.

My top 3 picks, in no particular order, are SGI (cos its already been mentioned ), Transmeta (possibly for power consumption patents in the mobile space. Doubt ATi would need them though) and Creative (sound card market). These are just guesses off the top of my head btw, and I don't have a clue about the market cap of any of these companies.

 

[MrGaribaldi]

Thanks for the link Dave.

My top 3 picks, in no particular order, are SGI (cos its already been mentioned ), Transmeta (possibly for power consumption patents in the mobile space. Doubt ATi would need them though) and Creative (sound card market). These are just guesses off the top of my head btw, and I don't have a clue about the market cap of any of these companies.

I really doubt that either of them will buy out Creative...
Nvidia allready has a good sounproduct (granted, not as a stand-alone souncard, but still), and, from what I recall, there was an interview with someone from ATI who said that sound products from ATI was waaaay of in the future, if ever... (Sorry, don't recall who was being interviewed where )

And I'm not quite sure how transmeta would figure into either company, unless they'd suddenly decided that they were going to go into unchartered (for them) land to see if they could make money there... (And if so, I'd really doubt that Transmeta is such a good deal)
If it was just for powersaving patents, I'm sure they could get a much cheaper license deal...


Nah, I'm sure it's all going to be used for buying better performance in HL2 for Nvidia and D3 for ATI.... Maybe even getting the other to have problems running the game... Or

 

[Fred da Roza]

I think that this move is an effort on behalf of both companies to build up cash reserves to insure themselves in the future should they have weak earnings. It may be insurance in the case of a price war that they remain competitive. I think the only reason ATi is doing this is because nvidia did it in Dec. It is an effort to remain psychologically competitive possibly. It says to the competition look we can afford to be competitive as well. Over the past few years ATi had 15 consecutive quarterly shortfalls before they could dig themselves out of the hole they financed the whole time period IIRC with a huge war chest of 900 million. (Something in that ball park anyhow.) Now their savings are down substantially and it is time to build these reserves back up. Nvidia possibly learned a lesson from ATi over that time period. I think the building of these reserves is a matter of survival in an extremely expensive and competitive market. Or it could be that they are making designs to purchase outside assets, but I doubt it. A dash of sobriety, I know, it isn't nearly as exciting as speculating about potential absorption of assets such as SGI but IMO more likely.

IIRC didn’t ATI recently state they would limit their stock option compensation packages because of shareholder complaints it was watering down the stock? Wouldn’t building this war chest have the same effect?

I’ve heard SGI has been selling off IP for a while to stay afloat. However for no apparent reason their stock has increased from ~$1.30 a share to close at $3.25 today; all in the last month and after being flat for over a year. Why has the stock jumped? Does somebody know some insider information that’s driving it?

In recent years SGI seem to have lost favor with one of their largest customers in the simulator market (Thales). In addition they even lost their exclusive contracts with Lockheed Martin and the US Special Forces on the Top Scene contracts. Personally the recent increases in their stock price (for no apparent reason) and ATI/nVidia’s filings makes me believe an SGI acquisitions is very plausible. Then again who knows.

 

[Sabastian]

IIRC didn’t ATI recently state they would limit their stock option compensation packages because of shareholder complaints it was watering down the stock? Wouldn’t building this war chest have the same effect?

I’ve heard SGI has been selling off IP for a while to stay afloat. However for no apparent reason their stock has increased from ~$1.30 a share to close at $3.25 today; all in the last month and after being flat for over a year. Why has the stock jumped? Does somebody know some insider information that’s driving it?

In recent years SGI seem to have lost favor with one of their largest customers in the simulator market (Thales). In addition they even lost their exclusive contracts with Lockheed Martin and the US Special Forces on the Top Scene contracts. Personally the recent increases in their stock price (for no apparent reason) and ATI/nVidia’s filings makes me believe an SGI acquisitions is very plausible. Then again who knows.

Consider that ATi has nearly completely transformed from being a card maker to chip provider and now is more directly competing with Nvidia. While I don't disagree with the move to compete more directly it was a bit of a gamble for ATi that looks as though it has paid off... so far. Now they have to compete with each other to provide third party suppliers with competitively priced products. This might begin to put a greater strain on margins. Anyhow I see these half billion offerings potentially as a just in case slush fund. Most certainly the employee stock option compensation package will create negative stock price pressure but you might also consider that a move to facilitate stability in a highly competitive and expensive market. At any rate I am not saying that I know 100% for sure that this is what the offerings coming from both companies is about .. only that this is what I think they are about. Maybe I am totally wrong and both are jockeying to make outside purchases of assets. I don't think so though. I guess we will have to wait and see.

 

[Fox5]

Thanks for the link Dave.

My top 3 picks, in no particular order, are SGI (cos its already been mentioned ), Transmeta (possibly for power consumption patents in the mobile space. Doubt ATi would need them though) and Creative (sound card market). These are just guesses off the top of my head btw, and I don't have a clue about the market cap of any of these companies.

I really doubt that either of them will buy out Creative...
Nvidia allready has a good sounproduct (granted, not as a stand-alone souncard, but still), and, from what I recall, there was an interview with someone from ATI who said that sound products from ATI was waaaay of in the future, if ever... (Sorry, don't recall who was being interviewed where )

And I'm not quite sure how transmeta would figure into either company, unless they'd suddenly decided that they were going to go into unchartered (for them) land to see if they could make money there... (And if so, I'd really doubt that Transmeta is such a good deal)
If it was just for powersaving patents, I'm sure they could get a much cheaper license deal...


Nah, I'm sure it's all going to be used for buying better performance in HL2 for Nvidia and D3 for ATI.... Maybe even getting the other to have problems running the game... Or

Nvidia recently dumped soundstorm(which is no longer absolute top quality audio, but it's still good), but I wonder if the engineers from ArtX wanna do another gpu/spu combo after gamecube? MAybe attack the value or super high end market with it?(anyone have any idea of how the gamecube's spu compares to current pc cards and integrated chips?)

 

[tazdevl]

I think SGI is the most likely reason, their market cap has been runing around $600-700MM and they have some solid IP. Whoever brought up PowerVR, that was a good thought, I never considered them.

One other thing to remember is that ATI filed for a shelf offering which means there's more potential instruments than stock involved. The market generally doesn't like it when companies dilute shares. I believe nVIDIA's filing was for stock only.

 

[Ailuros]

Whoever brought up PowerVR, that was a good thought, I never considered them.

PowerVR is IMHO an unbreakable part of Imagination Technologies. There I'd figure either all or nothing would be hypothetically for sale. Considering though the general upscale IMG has seen in the last year I have severe doubts they'd even consider it, unless some insane offer would come along.

Stock values might be an entire chapter of it's own, yet just have a look at the 52w range here:

http://finance.yahoo.com/q?s=IMG.L

On the other hand if yes, I'm afraid it might mean the doom of the last TBDR frontier.

 

[faraday]

They're both financing Duke Nukem forever (dont tell me you didnt saw this one coming), so it'll probably be a "The way its meant to get in the game" game.

 

[Dave Baumann]

I'm not sure about this yet, but I read somewhere that although NVIDIA filed for shelf registration they since haven't done the necessary paperwork to see it through - ATI have already done that.

 

[Ante P]

Thanks for the link Dave.

My top 3 picks, in no particular order, are SGI (cos its already been mentioned ), Transmeta (possibly for power consumption patents in the mobile space. Doubt ATi would need them though) and Creative (sound card market). These are just guesses off the top of my head btw, and I don't have a clue about the market cap of any of these companies.

Creative has a market value of close to one billion dollars. They're doing pretty well at the moment.

So nah I don't think so.

I surely don't hope so at least. I'd hate to have all my audio compressed into AC3 in the future.

 

[rwolf]

ATI is going to buy FutureMark...

 

[Laa-Yosh]

I've been told that a bunch of SGI patents have already been bought - by Microsoft:

I don't think that SGI has many patents left regarding computer graphics, Microsoft had to buy them in order to get the Xbox released (due to a 'minor' mixup caused by nVidia). I would be curious to find out what they have left that is relivent though, I don't think that the SGI war chest is as full as we would like to believe.

Anyone heard about this?

 

[Rugor]

No No No

ATI is aiming to buy out Molsons. That way they get far more than just one kegger.

 

[Fred da Roza]

I've been told that a bunch of SGI patents have already been bought - by Microsoft:

I don't think that SGI has many patents left regarding computer graphics, Microsoft had to buy them in order to get the Xbox released (due to a 'minor' mixup caused by nVidia). I would be curious to find out what they have left that is relivent though, I don't think that the SGI war chest is as full as we would like to believe.

Anyone heard about this?

I've heard something similar from a former SGI employee who now works in our office. Haven't heard the reason being Xbox but yes selling off graphics IP to MS.