Hi OrionX,
I held ATY shortly after their ipo and I started to accumulate after they bottomed out at C$4.5 pre 4:1 split in the c$10 (pre-split) range. Traded it several times, but mostly am a very long term holder over its history. I try to understand the graphics business and have held siii and nvda as well during the past few years.
I'm just guessing with the chromatic acquisition since it appears on the surface that there is no product announcement out there. If you went to the artxinc website, you'll see that the only motherboard chipset announcment was actually an ArtX one. I could be wrong, but as an investor, I have to try to draw conclusions from what is in front of me. The ArtX was done with us$400M worth of stocks, the chromatic acqusition was done purely with cash.
I did not mean to make you unhappy. My observation is that based on some public information at least, there are some disturbing parallels between what happened to siii and atyt.
Here's the parallels that caused siii graphics to go poof.
a.
(siii) Missed 1.5 graphics product cycles (savage2000 was slow but would have been king of the hill 8 months earlier).
(aty) Missed 1 product cycle (r128 was late and runs too slow when it showed up. (It would have been king of the hill 8 months earlier).
b.
(siii) Announced earnings shortfall due to accounting irregularities and recognition of revenue. CFO resigns. Red ink accelerates. CEO resigns, President resigns.
(aty) Announced earnings shortfall due to competitors [siii, ?nmgc?] dumping chips as they exit the graphics market. CFO resigns.
c.
(siii) Massive technical design staff turnover after significant stock price decline. High learning curve for new blood.
(atyt) Don't know. There is some news of turnover, certainly nowhere in the scale of siii graphics, but at least in the canadian side, the technical staff have fewer choices if they wish to stay in canada. If they were based in the valley, this pattern is more likely to occur.
d.
(siii) Declares graphics dead and goes for internet appliance market with Rio.
(aty) Declares desire to enter STB and SOC market.
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This is why I say that if there are any more (2? 3? 1?) -ve quarters, the stock could easily decline quite a bit.
chart.yahoo.com
Around Oct5 98. siii went below $2 from a peak of almost 25. A lot of negatives came into play to make this scenario unfold, so the same probably won't happen for ATY. Among key notables are :
1. siii executives purportedly sold their stock as each quarterly results was misreported.
2. class action lawsuit.
3. very dramatic steep fall in revenue and red inks accelerates.
ATY/atyt is still in a much better position than SIII was, and things could easily turn around with a good quarter, but they have to show good earnings. It was the earnings that brought this stock down, only good +ve earnings will restore investor confidence.
On the even brighter side, even though siii went below $2 in 98, it traded above $20 this year and now is bouncing around $10, so there is some good precedence here, so good luck.
As one last note, I think all the executives of the graphics players understand that the graphics market is not going to be a profitable one in the near future and have long made transition plans into other markets. The success of their companies depend on their abilities and luck in realizing and executing their plans. These new markets are quite big and the potentials are real. But there are some rough times ahead before the end of the tunnel.
- the often misunderstood long term chip investor
SbH |
