Bill - Re: "The real value of the stock should be 68 dollars per share based upon a P/E of 15 and 3.83 per share and declining earnings."
You are expressing valid doubts and concerns. Intel is a tough stock to own - it has a manic-depressive behavior for reasons that have been discussed quite amply on this thread.
I would suggest you find a stock with which you are more comfortable for the near term. Holding on to this company is not for the faint of heart. On the flip side, no guts, no glory, but glory may be a long time coming from your perspective.
Re: "2) DEC settlement - evidently INTEL did not tell the truth or why did we pay 700 million dollars in extortion ? "
Allow me to expound upon this.
First, after DEC filed the patent infringement suit and played the media card, I felt Intel had to take DEC to the mat no matter what and vindicate itself, clearing its good name.
However, in retrospect, the situation Intel found itself in was akin to the situation where Man_A accuses Man_B of raping Man_A's wife, then files a civil suit against Man_A for damages, making sure the entire world is notified of how Man_A has been violated. (We will ignore the effects on Man_A's wife for now.)
So, Man_B is publicly accused of a heinous crime and of course is presumed guilty by the media and anyone else who knows how to spell the word monopoly. Ergo, Intel was a;raedy guilty in the eyes of the naive public and CNBC puppet heads..
Now, how could Intel handle this situation? They filed an injunction against DEC (DEC refused to return Proprietary future CPU information) and they filed a patent infringement countersuit. For both actions, Intel was again villified in the press - for being brutal , "vindictive" and heavy handed - especially to a "Customer".
To carry out these law suits, Intel could easily have gone to the wall, spent countless hours, days weeks, months, years and who knows how many millions of dollars on legal fees, expert witnesses, depositions, patent claim suits, etc. I wouldn't be surprised if Intel burned its way through $100,000,000 and 5 or 6 years of increasing NEGATIVE publicity on this issue.
And what would Intel gain? Their good name?
They could just as easily have LOST THAT GOOD NAME!
Now, the settlement - going back to my Man_A, Man_B analogy - In order for Man_A to drop the nasty civil damage/rape suit, Man_B agrees to compensate Man_A with a payment of X dollars and Man_A gives up his wife to Man_B as part of the deal! And, Man_B gets to "lease" the wife back to Man_A for future payments to Man_B. Everybody wins!(obviously the wife has no say, in this case.)
So, Intel gets a fab that they wouldn't otherwise have had at a cost that is probably well below market value, even after it is updated to Intel standards. They also get a trained work force that is already in place - no major relocations required except for some Intel managers that will undoubtedly be getting a real taste of high state income taxes in the near future as well as an opportunity to reelect a Kennedy to Congress every few years.
Intel gets a committed customer - one which had publicly endorsed Intel's arch-rival (AMD). DEC is now on board for MERCED and other Intel products, as well - and DEC has now become TOTALLY dependent on Intel for ALL ITS PROCESSOR NEEDS (the real ones, not that K6 stuff).
Moreover, Andy and Intel's technical designers and CPU architects will not be spending hundreds and thousands of endless wasted hours documenting the past design choices, arguing in depositions, hearings and the like.
Intel will soon go about its business again - building fabs and making and selling chips, hopefully staying out of the court rooms and off the headlines of the news media.
Paul |
