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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (12469)	12/8/2021 10:50:05 AM
From: Kirk ©	Respond to of 26439

It looks like analysts are missing the main reason Intel is spinning off Mobileye and some smaller related bits... My guess is it is very hard to get GOOD people to work for companies in divisions that have a ton of growth but are trapped inside larger companies where stock incentives won't properly reward the success. This is a good way to tie pay with performance that one of my biotech stocks is using too. That is the bigger company gobbles up a smaller company and has maybe a 5-year no-compete work for us deal with the founders then they want to leave and start a new company. The big company then spins off the smaller company, putting the people they want to keep back in charge and they and their people can then profit from the growth and success with a soaring stock price while at the same time, by owning 80% of the shares, Intel and others that do this also benefit. Behind Intel's decision to take Mobileye Public Judy Lin, DIGITIMES, Taipei Wednesday 8 December 2021 Chip giant Intel released a statement on December 6, announcing it intends to take its autonomous driving tech unit Mobileye to IPO in mid-2022. Though it stressed that Intel will remain the largest shareholder and continue a strategic alliance with Mobileye, critics see strong incentives for cashing out for good reasons. The statement quoted Intel CEO Pat Gelsinger as saying, he and Mobileye CEO Amnon Shashua agreed that "An IPO provides the best opportunity to build on Mobileye's track record for innovation and unlock value for shareholders." Shashua is the founder of Mobileye and a computer science professor at Hebrew University in Jerusalem. The company went public in 2014 for the first time but was sold to Intel for $15 billion in 2017. The new IPO could be valued at more than $50 billion, according to a Reuters report. Shashua will continue to lead the team as CEO after the IPO, which will include the recently acquired mobility-as-a-service startup Moovit and the Intel teams working on lidar and radar development, according to the statement. Electric vehicles and autonomous driving are seen as the future of mobility, and the best time for related IPOs might be yet to come. Andrew Lu, a senior semiconductor industry analyst commented on Facebook that Mobileye is Intel's "golden goose" for the next 20 years, and it doesn't make sense why Intel should get short-term profit by taking Mobileye public at this point of time. Intel's statement explained it currently owns 100% of Mobileye shares and is expected to retain major ownership following the completion of the IPO, while stressing that it does not intend to spin-off or otherwise divest its majority ownership interest in Mobileye. Brian Sozzi, Yahoo! Finance anchor and editor-at-large wrote, floating Mobileye on the public market would free up resources for Intel, which has committed big capital for new foundries. Gelsinger has announced $17 billion to build new fabs in the United States and another 80 euro for the decade in Europe, in light of significant growth opportunities in chip demand, as the share of semiconductors is expected to be 20% of a premium vehicle's total bill-of-materials (BOM) by 2030. As Mobileye and Moovit deals were made by his predecessors, Gelsinger, who has been an engineer for 30 years of his life in chip manufacturing, might want to focus on his strength. The priority for him as the CEO is to help Intel deal with competitions with AMD and Nvidia on the CPU and GPU front, and Samsung and TSMC on the foundry side. Morris Chang, founder of TSMC, recently commented that Gelsinger probably has been under pressure trying to beat Samsung and TSMC by 2025, because his tenure is likely to end that year, for he would be 65 years old by then, and would be required to retire. That time pressure would have driven him to decide to focus the resource and talents on the core business of semiconductor manufacturing. However, Reuters report pointed out that Gelsinger has also been facing pressure from activist investors to consider spinning off its costly chip manufacturing operations in the future. From digitimes.com