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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: Amy J who wrote (139495)	7/18/2001 8:16:16 AM
From: GVTucker	Read Replies (1) \| Respond to of 186894

Amy, RE: I don't think you would want to advocate what management at General Motors or Chrysler did back in the early '80's. The auto industry didn't get what Barrett gets. The riskiest thing a company like Intel could do is to hide in its existing businesses and not venture into something new. It's got to take the risk to find new opportunities for the future. Avoiding risk is the biggest risk to any large company. Stagnation kills. While conscious risk can be scary, it is certainly the better option. Actually, when I think of GM and the 80's, I remember two large acquisitions, Hughes and EDS. Those two companies were big risks, but GM decided that their core auto business would not help growth any more. But while those acquired businesses did well, GM lost focus on their core business, autos, which still contributed the lion's share of revenues. It didn't contribute the lion's share of profits any more, though because the business was such a mess. Chrysler, of course, didn't make any forays outside autos. One of the main reasons was because they were practically broke. But what brought them out of near bankruptcy was a focus on their core business. In fact, they retrenched so much that they really didn't venture outside of the US. And that concentration was to Chrysler's benefit. Taking risk outside your basic business is fine, but Intel shouldn't lose sight at what feeds the bulldog, microprocessors.

To: Amy J who wrote (139495)	7/18/2001 1:15:00 PM
From: Road Walker	Read Replies (3) \| Respond to of 186894

Amy, I still don’t have a problem with Intel investing in new businesses. But from my shareholder perspective, I am very concerned with their choices of new businesses, with the extent that they gambled on new businesses, and with their execution in the new businesses. (All data are profit/loss from operation) Intel “other” losses over the last four quarters: 3Q00 - $600 million 4Q00 - $657 million (9.5% seq. increase) 1Q01 - $1.041billion (58% seq. increase) 2Q01 - $1.249 billion (20% seq. Increase) Intel “other” losses as a percent of IAG profits 3Q00 - 17.6% 4Q00 – 35.5% 1Q01 – 61.9% 2Q01 – 85.2%  If, in the 3rd quarter, “other” losses increase by 20%, and IAG profits remain flat, it will result in an Intel operating loss of $32.8 million.  In the 2nd quarter, 19% of Intel sales reduced Intel profits by 85%.  Since 3Q99, Intel has accumulated an operating loss of $5.911 billion in “other”. Coupled with over $10 billion original investments in the companies, total is over $16 billion. Amy, the tail is wagging the dog. The microprocessor business is a profitable gem. Intel has never proven their ability to buy a company and then manage it to leadership and profit; yet they are wagering their entire profit structure on that ability. Mr. Barrett’s spending spree for these companies, and his tolerance of their losses, has removed Intel from the short list of the world’s most profitable companies. And if they go to a loss next quarter, they will immediately lose the long built confidence of the investment community. The Intel risk will always be higher, the PE always lower. It’s time for Intel to exit the businesses that are less likely to be successful, and/or the ones that are losing the most money. It’s time to clean house.