Bosco,
I doubt if the CFO resigning had to do with the AAPL premature press-release. Jobs just hates it when people steals his thunder. I doubt if the CFO has any visibility into press-releases of that nature. Very likely a lowly peon in IR will be the scapegoat. If that still doesn't convince Jobs to put the radeon back into his precious box, a Director type person could also be sacrificed, but that would be extreme. It would make more sense to promote a new Director and then sacrifice him/her --- that would preserve their talent pool. <VBG>
I think the CFO's resignation has one of three possibilities
1. The numbers were so bad last Q, he lost all credibility with the investment community, and a new face had to be put in. This is the best scenario for ATY since that implies an attempt to mend fences with the (canadian) institutions.
2. His package, is largely dependent on stock options. If I remember correctly from the last annual report, he's paid a paltry can$200K (scarcely us$130K). With the stock price about 40% of their peak right now, his total pay has to be pretty bleak, so he could easily decide to move to greener pastures. This would be bad, since that implies he had no confidence in the stock recovering.
3. For whatever reasons, he felt he did not have enough visibility into the debacle that caused the earnings revision, so he had to leave to preserve his professional integrity. This would be bad, since that implies that the controls to ensure accurate financial reporting is weak or missing in the company.
The above are just blatant conjectures with no basis at all, I'm making up stories as I go along. :)
IMO, ATYT was undervalued for a long time, but it's main weakness was that the float was too big. P/E wise, it was trading like a bank stock for almost 2 years even when it had 100% growth in earnings. Then the last Q was a disaster.
When I said it might go like SIII, I basically meant the Banatao and Gary Johnson days, when their mkt share collapsed, and they started to lose money but the quarterly earnings did not reflect the losses for TWO QUARTERS. However this is an unlikely scenario o/w I wouldn't be buying, but if I'm wrong, I'm certainly prepared to make a hasty exit. After being a bull for so long, I dodged the bullet on this stock, and it's only fair if I pay back some of my winnings to the suffering stockholders. :(
Anyway, on May24th, ATYT announced an earnings shortfall, and that's basically what destroyed their stock price (closed 40% down for the day). For my own reasons, I sold all my ATY a couple of wks before that (I figured out from the annual report MASSIVE employee stock options were vesting end of May). The exit was a preparation for reentry should there be a 10% correction. Didn't play out that way.
I did buy on the big crash, and made a decent return, but I sold before the earnings came out since I no longer had confidenece in the company. I would have stayed away completely, but the radeon's successful reviews piqued my interest and so I've been trying to get back in. The last time I sold was when the Jobs story broke, figuring the short term is going to be ugly.
However, don't be so sure that there is a resurgence with graphics. If you looked at nvda closely, you'll see that there was a cup and saucer formation, but the stock has crashed badly after that --- there's always something funny in these graphics companies :
In SIII's case, it was creative accounting and two missed product cycles.
In NVDA's case, it was 24M (post-split) employee stock options.
In ATYT's case, it was one weak product cycle, and a dramatic reversal of earnings.
Everybody else (crus, nine, dimd) are already gone from graphics. Effectively, the graphics pie will be divided among INTC, ATYT, NVDA. Scraps might still go to trident and matrox.
a. The entire graphics business means nothing to INTC, but their i810 is what killed siii's graphics from the bottom while ATYT squeeze them from the middle. The i815 will make life difficult for all.
b. ATYT screwed up badly last quarter, but the new chip looks decent, and there was some momentum until the JOBS fiasco happened. There is clearly some potential upside. Especially if you sat down and compared the revenue of ATYT against nvda now. But, if they screw up again, they will do an SIII-like death spiral. They have the settop box and Nintendo business, which is an escape hatch from PC graphics if the i825 or other intel integrated chips takes over most of PC graphics. They basically took over NMGC's mobile graphics business too.
c. NVDA had a great technological advantage with the NV15, and the XBOX win was simply the right sort of news for the momentum guys to jump in. But now they need the NV20 badly since it looks like the Radeon is faster where it counts (true color and high res). Their main weaknesses : (1) they are trading at valuations that probably has factored in two years of consistent 100% growth. They are trading as if they are the market leader, and the revenue numbers do not support that. (2) the stock options vesting and exercise by employees made a mockery of the TA guy who pointed out the cup and saucer formation. Their float is only 46M, 24M is big compared to that. :) Also, as long as they stay completely in PC graphics, they face a huge danger --- the i815 and possibly i825(?) could eventually crush all life out of PC graphics.
SbH
- making it up as I go along. <G> |
