Intel more than dabbles in the graphics market already, so why don't they become really aggressive and absorb Nvidia? The FAB power of Intel would be put to good use with Nvidia's GPU designs. The X-box could pan out with Intel getting the majority of the hardware action (CPU, GPU, Chipset, and Motherboard). Perhaps I'm overlooking some things, but on the surface it looks to that Nvidia is a worthwhile canidate for Intel to try to take over.
Why hasn't Intel attempted to acquire Nvidia?
- Thread starter Brimstone
- Start date
I doubt nVidia would have it. nVidia is still doing very well financially, and has no reason to allow another company to buy them out.
In particular, I doubt that Intel is at all interested in selling add-in boards with graphics chips. They're far more interested in integrated solutions.
In particular, I doubt that Intel is at all interested in selling add-in boards with graphics chips. They're far more interested in integrated solutions.
Just because you have the money to offer a decent price for another company, doesn't mean that other company has to accept. It's not like, "oh no, Intel's buying us out and there's nothing we can do about it". I suppose they could attempt a hostile take over if they could buy up more than 50% of Nvidia's stock, but that seems like kind of an extreme to go to.
But with nVidias share price being so low at the moment, isn't this the ideal time for a company with enough assets to buy up a bulk chunk of nVidia? But then again I don't how much of nVidia has been exposed through public share offers.
Besides, wouldn't M$ be the company who'd like to eat up nVidia?
Besides, wouldn't M$ be the company who'd like to eat up nVidia?
If there was some sort of stock swap, then would Nvidia's assests and talents produce more profit being a part of Intel? Thats would the heart of the question for those invested into Nvidia. I'm not familar with how big corporate take overs happen. When 3dfx took over Gigapixel wasn't most of that with stock?
BoardBonobo said:
As long as they've exposed less than 50% stock they really don't need to worry about a hostile take over, and even if its more than that it's kind of unlikely that intel would get every share before Nvidia bought some back to bolster themselves.
MS buys everything, so I agree they're more likely to buy Nvidia.
Oompa Loompa
Newcomer
A) Intel doesn't want the Justice department coming down on their asses once they've finished with Microsoft.
B) Intel is making huge capital investments in refitting for 300mm/0.09um, and is conservative with its cash reserves.
C) The Chips&Bits acquisition didn't go particularly well
D) NVIDIA is too expensive in relative terms. Yes, NVDA has fallen, but INTC is at a 4-year low. (Any acquisition would probably be mostly a stock transaction)
B) Intel is making huge capital investments in refitting for 300mm/0.09um, and is conservative with its cash reserves.
C) The Chips&Bits acquisition didn't go particularly well
D) NVIDIA is too expensive in relative terms. Yes, NVDA has fallen, but INTC is at a 4-year low. (Any acquisition would probably be mostly a stock transaction)
Speaking of values, I can remember back late last year, nVidia's market capitalization was over 6 Billion, while Ati's was about 2 Billion.
https://us.etrade.com/e/t/invest/quotesresearch?qmenu=2&prod=ATYT:NSDQ:EQ
https://us.etrade.com/e/t/invest/quotesresearch?qmenu=2&prod=NVDA:NSDQ:EQ
now its 1.39 Billion for nVidia
and 1.38 Billion for Ati as of midnight, August 4th, 2002
(I always go by market capitalization to really see how "big" a company is in economic terms)
So yes indeed, both companies have taken a downturn, but it was more extreme for nVidia.
https://us.etrade.com/e/t/invest/quotesresearch?qmenu=2&prod=ATYT:NSDQ:EQ
https://us.etrade.com/e/t/invest/quotesresearch?qmenu=2&prod=NVDA:NSDQ:EQ
now its 1.39 Billion for nVidia
and 1.38 Billion for Ati as of midnight, August 4th, 2002
(I always go by market capitalization to really see how "big" a company is in economic terms)
So yes indeed, both companies have taken a downturn, but it was more extreme for nVidia.
jandar said:
NVIDIA's stock has been way overvalued. They were puffed up like the Stay Puff man (Super Puffer!). They are closer to where they should be for their sector now, then at their highest point. Looking at the numbers it looks extreme perhaps, but at least they are finally around the prices of the rest of the semiconductor companies.
Microsoft could just about buy anything if they really wanted to (everything has its price). Wasn't there a bit of news that M$ considered buying Nintendo for $30 billion dollars? Anyway the point of me raising the Intel/nVidia combination has to do with synergy. The "fabs" of Intel could be taken advantage of by nVidia GPUs.
If you consider that in mid 1998, just before the release of the GeForce, their stock was at around $20/share, and has split twice. So, in relative terms, it was at $5/share, roughly.
nVidia's revenues have approximately doubled every year since then. It stands to reason, therefore, that in the four years since, their stock should be set at roughly 16 times its value in mid 1998, or $80.
As long as nVidia doesn't slip up majorly, their stock should definitely improve significantly over the next few months. The current low is mostly a reflection of the overall lack of faith in the US economy right now.
nVidia's revenues have approximately doubled every year since then. It stands to reason, therefore, that in the four years since, their stock should be set at roughly 16 times its value in mid 1998, or $80.
As long as nVidia doesn't slip up majorly, their stock should definitely improve significantly over the next few months. The current low is mostly a reflection of the overall lack of faith in the US economy right now.
Correct Chalnoth. NVidia's value was not "puffed up" in comparison with other semiconductor companies because value based on future earnings. The growth of the CPU market isn't as large as the GPU market. NVidia has been doubling earnings yearly with regularity. Therefore, investors simply calculated out what this would mean if carried forward for a few years and discounted that to find the present value.
If two stocks are in the same industry, and one is doubling revenues and earnings every year and one is growing at 10% a year, the first one will have a significantly higher P/E ratio and valuation. A train moving fast is more valuabel than a train moving slow.
Moreover, NVidia has lots of other things that factor into its valuation: lots of operating cash, low lebt load, lots of valuable contracts with vendors, a commanding market lead, a good brand name, proven execution, etc. Other GPU vendors aren't going to have the same valuation because their situation is different.
If two stocks are in the same industry, and one is doubling revenues and earnings every year and one is growing at 10% a year, the first one will have a significantly higher P/E ratio and valuation. A train moving fast is more valuabel than a train moving slow.
Moreover, NVidia has lots of other things that factor into its valuation: lots of operating cash, low lebt load, lots of valuable contracts with vendors, a commanding market lead, a good brand name, proven execution, etc. Other GPU vendors aren't going to have the same valuation because their situation is different.
Nvidia currently has 67% of thier shares outstanding, almost entirely tied up by institutional investors.
As folks start closing out 401k's and mutuals because of the beating they have been taking and rolling it into "safer" alternatives, NVDA's share price has declined accordingly. NVDA is being hurt by the lack of investor faith in general, and not flaws with the operation of the company itself.
http://www.nasdaq.com/asp/Holdings.asp?symbol=NVDA`&symbol=&selected=NVDA`
Using Market Cap to determine how "big" a company is probably the least informed, useless metric available. There are many more effective metrics that give you a better idea, like number of employees (my personal metric), revenue, net, assets, etc.
Calling NVDA overvalued at any time this year is pretty ludicrous, but calling NVDA overvalued compared to direct competitors or even the semi-con market just shows you've done no research, and really shouldnt have commented in the first place.
As of the last time I checked, NVDA's P/E Ratio was 6.6(!!). Vs. other semicon companies, this makes it extremely undervalued, even with the revenue decrease written in. While most semi-con companies are struggling to turn a profit, NVDA is doing so very aggressively.
http://screening.nasdaq.com/screening/quotes_competitor.asp?symbol=NVDA`&selected=NVDA
Currently Nvidia's PEG Ratio is 0.47. Thats undervalued in any market.
Comparing ATI vs. NVDA's fundamental's directly is a great example of a company you should invest in and a company you shouldnt invest in.
While NVDA's is a picture of a company with increasing revenue, and net, even while nearly doubling its R&D expenditures:
http://www.nasdaq.com/asp/extendfund.asp?kind=extendfund&symbol=NVDA&selected=NVDA
ATI is a horror show of losses inspite of itself:
http://www.nasdaq.com/asp/extendfund.asp?kind=extendfund&symbol=ATYT&selected=ATYT
That pretty much says it all.
A "Poison Pill" does not prevent a takeover. The usual method of taking a "Poison Pill" is to saddle the company up with debt beyond its market cap in an attempt to make a hostile takeover very unattractive, as the receiving company will be responsible for the debt, effectively more than doubling the purchase price of the company. The obvious downside is if the takeover is backed off, the company still has the debt and it could end up killing the company in the process, so its used more for sabre rattling than actual practice.
NVDA Insiders currently control 33% of shares, and are very close with several of thier institutional investors. Many of them believe that NVDA's potential in the next 5 years will be pretty spectactular, and the hype of "The Next Intel" is still looming out there. Any company attempting to take over NVDA hostily would at best do so by a few slim margin after a very tough fight, much tougher than the HP/Compaq merger votes. IMO, I dont think its worth it to any of the players at this time to do so. Microsoft, the only company with the obvious resources and willingness, is frankly covertly putting thier weight behind NVDA. They'd like to see NVDA become a major hardware power and displace Intel a bit, as a fractured hardware market serves them best as the standards makers. Acquiring NVDA would not only make every graphics vendor in the world scream bloody murder, it would also raise the distinct ire of INTC, who sees NVDA as one of thier top three threats in the market.
As folks start closing out 401k's and mutuals because of the beating they have been taking and rolling it into "safer" alternatives, NVDA's share price has declined accordingly. NVDA is being hurt by the lack of investor faith in general, and not flaws with the operation of the company itself.
http://www.nasdaq.com/asp/Holdings.asp?symbol=NVDA`&symbol=&selected=NVDA`
Using Market Cap to determine how "big" a company is probably the least informed, useless metric available. There are many more effective metrics that give you a better idea, like number of employees (my personal metric), revenue, net, assets, etc.
Calling NVDA overvalued at any time this year is pretty ludicrous, but calling NVDA overvalued compared to direct competitors or even the semi-con market just shows you've done no research, and really shouldnt have commented in the first place.
As of the last time I checked, NVDA's P/E Ratio was 6.6(!!). Vs. other semicon companies, this makes it extremely undervalued, even with the revenue decrease written in. While most semi-con companies are struggling to turn a profit, NVDA is doing so very aggressively.
http://screening.nasdaq.com/screening/quotes_competitor.asp?symbol=NVDA`&selected=NVDA
Currently Nvidia's PEG Ratio is 0.47. Thats undervalued in any market.
Comparing ATI vs. NVDA's fundamental's directly is a great example of a company you should invest in and a company you shouldnt invest in.
While NVDA's is a picture of a company with increasing revenue, and net, even while nearly doubling its R&D expenditures:
http://www.nasdaq.com/asp/extendfund.asp?kind=extendfund&symbol=NVDA&selected=NVDA
ATI is a horror show of losses inspite of itself:
http://www.nasdaq.com/asp/extendfund.asp?kind=extendfund&symbol=ATYT&selected=ATYT
That pretty much says it all.
A "Poison Pill" does not prevent a takeover. The usual method of taking a "Poison Pill" is to saddle the company up with debt beyond its market cap in an attempt to make a hostile takeover very unattractive, as the receiving company will be responsible for the debt, effectively more than doubling the purchase price of the company. The obvious downside is if the takeover is backed off, the company still has the debt and it could end up killing the company in the process, so its used more for sabre rattling than actual practice.
NVDA Insiders currently control 33% of shares, and are very close with several of thier institutional investors. Many of them believe that NVDA's potential in the next 5 years will be pretty spectactular, and the hype of "The Next Intel" is still looming out there. Any company attempting to take over NVDA hostily would at best do so by a few slim margin after a very tough fight, much tougher than the HP/Compaq merger votes. IMO, I dont think its worth it to any of the players at this time to do so. Microsoft, the only company with the obvious resources and willingness, is frankly covertly putting thier weight behind NVDA. They'd like to see NVDA become a major hardware power and displace Intel a bit, as a fractured hardware market serves them best as the standards makers. Acquiring NVDA would not only make every graphics vendor in the world scream bloody murder, it would also raise the distinct ire of INTC, who sees NVDA as one of thier top three threats in the market.
Chalnoth said:
You're using the bull(shit) market of the last several years as a guide. Unfortunately reality has now returned so, no, you will not be seeing it up there around $80 again any time soon. By the way the stock market is all about "faith", it has almost nothing to do with reality. The economy now is no worse than it was 2-3 years ago, except people have come to their senses and realized that you can't just throw all your money at a highly overpriced company and expect to make 300% of your investment. Nvidia's share price (and share prices across the board) are much closer to reality now than they have been for the past several years. Don't expect it to go back up to $80 any time soon, if ever. It's all about perception...you could have the greatest company on the face of the planet, but if people perceive you to suck your stock isn't going to be very valuable.
Furthermore, look at Intel's stock now. I guess being the "next Intel" isn't really all that great after all. Saying any of these stocks is undervalued now is ridiculous. They're only undervalued if you can get people to buy them to increase their price, and guess what: no one is going to!
No, nVidia's stock price cannot skyrocket in today's market. It may take only months, or may be as long as a few years, before that changes.
Most recessions of the past have been less than six months, if I remember correctly.
Additionally, we're not really in much of a recession right now. Unemployment is still down, and the economy seems to be doing well if you look at factors besides the stock market (such as the services industries).
Still, we probably won't see a return to confidence until this whole thing in the Middle East settles down (I don't think it's going to stop anytime soon...but it could reduce to a low simmer...).
Regardless, it should still be obvious that nVidia's stock is drastically undervalued today, which means it should be a very good buy right now (Just don't expect it to go up a whole lot for another month or two...).
Most recessions of the past have been less than six months, if I remember correctly.
Additionally, we're not really in much of a recession right now. Unemployment is still down, and the economy seems to be doing well if you look at factors besides the stock market (such as the services industries).
Still, we probably won't see a return to confidence until this whole thing in the Middle East settles down (I don't think it's going to stop anytime soon...but it could reduce to a low simmer...).
Regardless, it should still be obvious that nVidia's stock is drastically undervalued today, which means it should be a very good buy right now (Just don't expect it to go up a whole lot for another month or two...).
Oompa Loompa
Newcomer
You do not. Historically, mean recession length is ~750 days.Chalnoth said:
