It seems like pricing it however they liked could be fraud to investors. Especially if it can be shown they did so to make one part of their company look more attractive.
I really hope they aren't doing this but have some justifiable metric for determining the price of their intercompany transactions.
Intel said that they are capping how much the foundry can charge internally for wafers based upon competitive pricing. There's a lot of leeway in that statement though. I have my doubts that Intel foundry is charging Intel design what they would if they were truly independent.
10 nm is so bad that there's only so much you should charge though.
It seems like pricing it however they liked could be fraud to investors. Especially if it can be shown they did so to make one part of their company look more attractive.
I really hope they aren't doing this but have some justifiable metric for determining the price of their intracompany transactions.
I had bought some INTC after the crash based on the decent margins presented for client group even if the forecast wasn't great. I guess I bamboozled myself by not paying attention to the fact these numbers by business unit could apparently legally be entirely arbitrary. 🤣So long as Intel fully owns both there is no fraud. They could choose to price the wafers at cost and show in their books that they are losing a lot of money on the foundry and making a lot on x86, and that doesn't hurt investors anymore than charging sky high prices for wafers to show a profitable foundry and money losing CPU business. The bottom line for INTC is the same either way.
The only time fraud is possible is when they are preparing to split them into separate ticker symbols. Then Intel needs to have their ducks in a row accounting-wise - and investors would probably demand greater insight than a typical financial report would include so they could fairly price each piece.
Actually, they can price wafers however they want, because It still is a single company.
It depends on which business unit they want to look better. Foundries with smaller loss or the other groups with higher profit, of course revenue will stay the same.
@gdansk didn't think about that, what you said is true considering this is a publicly traded company.
But it seems like no one is falling for it - given Intel stock price.
🤔 I do that too. But it really isn't illegal to have deliberately misleading accounting? Could AMD legally have the client group buy some MI300X accelerators from DCG at ridiculous prices to make the DCG financials look better? For whatever reason growth in AI segments is valued higher by investors so it seems to me that transaction would be deceptive even if at the end of the day the overall corporate results are correct.An investor who couldn't see that should stick to buying mutual funds or indexes rather than individual stocks.
Intel's stock price includes both. If one company has one subsidiary valued at $200 billion and the other subsidiary is carrying $100 billion in debt, it would be no different than a company with two subsidiaries each valued at $50 billion. An investor who couldn't see that should stick to buying mutual funds or indexes rather than individual stocks.
The problem (as seen with the MS Surface lineup, and Intel NUCs), is Intel thinks anything they make is "Premium" and priced that way.What Intel should have done (and still can) in the consumer domain is swallow their pride and utilize their unique position. They are the only company that has x86 CPUs, GPUs and their own fabs. They should do what AMD did once upon a time. Accept lower margins and start offering gaming SoCs, semi custom even (for consoles and handhelds), and gaming GPUs (DIY, laptop even). But they need to go all in and not just top their toes like they have been doing for so long. Bring a full product range from top to bottom at half the price or lower of what nvidia offers.
🤔 I do that too. But it really isn't illegal to have deliberately misleading accounting? Could AMD legally have the client group buy some MI300X accelerators from DCG at ridiculous prices to make the DCG financials look better? For whatever reason growth in AI segments is valued higher by investors so it seems to me that transaction would be deceptive even if at the end of the day the overall corporate results are correct.
That's the thing about being an executive at a major company. After a certain point in moving up the corporate ladder, you can only fail upwards because the candidate pool for experienced senior executive or C-suite roles becomes exceptionally limited. There's always the option of promoting from within, but more often than not it's to bring an external party on-board, ideally someone with prior experience and a new perspective. Between hiring someone with zero experience versus someone who had been a CEO, albeit a controversial one, many firms opt to choose the devil they know rather than the one they do not.This is technically offtopic, but still interesting to see as it relates to the current status quo of Intel, and the reasons why some executives may not feel fully compelled to help turn the ship around.
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What direct executive decisions do we know for sure happened under his leadership that put Intel in the position they are in today. Not defending him. Just curious.This is technically offtopic, but still interesting to see as it relates to the current status quo of Intel, and the reasons why some executives may not feel fully compelled to help turn the ship around.
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That's the thing about being an executive at a major company. After a certain point in moving up the corporate ladder, you can only fail upwards because the candidate pool for experienced senior executive or C-suite roles becomes exceptionally limited. There's always the option of promoting from within, but more often than not it's to bring an external party on-board, ideally someone with prior experience and a new perspective. Between hiring someone with zero experience versus someone who had been a CEO, albeit a controversial one, many firms opt to choose the devil they know rather than the one they do not.
At least Raja is more photogenic. BK is painful to look at in that picture.Sounds like Raja.
We can search the things we was heavily criticized for, but my TL;DR would be he failed to address the internal problems that were already obvious (for insiders, not us back then) and instead focused on "financial optimization" and chasing all kinds of other markets while the company's main business was already in decay.What direct executive decisions do we know for sure happened under his leadership that put Intel in the position they are in today. Not defending him. Just curious.
Sadly publicly traded companies answer to their shareholders, who also want short term stock price gains- they want to pump it up, sell when it's high, and leave someone else holding the bag. They are just aligning the CEO's motivations with their own.At least he worked hard... At something!
The share buyback thing: whoever though it would be a good idea to reward notoriously short term thinkers like the CEO, board and senior leadership - that is all those whose biggest renumerations are based on shares - with the option to use company money to inflate those shares?
That something like that isn't illegal tells us who writes the rules!
Let's not forget, it wasn't always that way. Stock buybacks were illegal till 1982, and IMO should be made so again:Sadly publicly traded companies answer to their shareholders, who also want short term stock price gains- they want to pump it up, sell when it's high, and leave someone else holding the bag. They are just aligning the CEO's motivations with their own.
Capitalism, yay
No capitalism means no Intel, comrade. Idiots looting the till doesn't make it capitalism either.Capitalism, yay
No capitalism means no Intel, comrade. Idiots looting the till doesn't make it capitalism either.
The share buybacks I knew. The other missteps weren't as clear. Many of these problems were short-sighted shareholder focused. Damaging their longevity.We can search the things we was heavily criticized for, but my TL;DR would be he failed to address the internal problems that were already obvious (for insiders, not us back then) and instead focused on "financial optimization" and chasing all kinds of other markets while the company's main business was already in decay.
IFS hit the wall under his leadership, the datacenter GPU failures did not help either. He was also overly concerned with his own financials, one could say almost to the detriment of the company: he got himself a pay rise while he was laying off ~11% of the workforce (12k jobs), and he mysteriously sold all the Intel shares legally allowed before Intel disclosed Spectre/Meltdown.
During his tenure Intel kept spending a lot on stock buybacks, something that unfortunately continued under Bob Swan as well. (this puts his Intel stock sell described above in a whole new light) We're talking tens of billions of dollars in total. Intel essentially destroyed their R&D and talent pool in favor of performing well on the stock market. Imagine the Intel of today with a war chest of 20-30 billion dollars, even in the form of diversified stakes in other companies. It boggles the mind if you consider both BK and Bob Swan knew that Intel was in trouble in terms of technological leadership, yet they continued to invest most of the company's profit in their own shares.
Remember Intel's attempt to enter the mobile market and the contra-revenue scheme that probably also cost Intel another 5-10 billion in total? Yup, it was him Imagine pumped billions to carve a place in the market only to not have competitive products to follow up with.
There were probably other things I don't remember or can't find quickly enough. He was definitely not the only cause for Intel's downfall, but he worked hard to help the boulder reach critical mass.