This is a brilliant acquisition by $INTC. Now some of you might say ‘that’s madness buying $MBLY for $16b, why that’s 40x sales.’ Yeah but so what.
More to the point, instead of wasting money on idiotic buybacks, the company is taking out a Yolo trade with MBLY. They’ll be able to scale the business and the tech far greater than anything MBLY could’ve done on their own. Self driving cars, apparently, is the future. With this acquisition, Intel lo but assures themselves a dominant position.
The acquisition price is upwards of 30% higher from the Friday close.
In spite of MBLY fetching for such an ornate price tag, the company had been growing and will help Intel in that regard, even if the overall effect is nothing more than a rivulet in a larger body of water.
With approximately 15% of the shares short or anywhere from 20-25m shares, a sundry of bears stand to get castrated today. This stock had been a bear favorite due to valuation. The timing of this acquisition coincided with a weak overall market — meaning there’s likely an elevated amount of shorts stuck in the stock now.
Sucks to be them.
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Automomous driving is a 5k$ package on the Tesla.
Delphi/Intel/Mobileye are already working on a retrofit for older cars GM and Volvo with a specilaized intel chip capable of 20 trillion operations per second.