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Esekla

 
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  • InvenSense In The Short And Long Terms [View article]
    No, I think what I'd said in the comments of my earnings recap is that the stock price wouldn't recover until after options expiration. Some of that was the weeklies, but more was the November contracts expiring this weekend.

    Two things have changed since then:

    1. The 10-Q was published, which gives more detail than expected on the Apple deal. I've long said that I'd want to know the terms of the deal before determining how positive to be about it. As presented in this article, the data we have so far pretty much pins the terms to the low end of even my downwardly revised expectations, or maybe even lower than that.

    2. Seeing how the options and short data has evolved indicates that there may still be more pain to come. This doesn't really affect valuation, but it didn't seem appropriate to focus on a long-term price target, which I'm maintaining for now, when it's seeming very likely that the weeks to come, and even possibly the next quarterly report, may defy my earlier rebound predictions. The one thing that will mitigate the downside is the substantial short position out there, but I think the fundamentals and the broader market being within 5% of all times highs, mandated me adopting a more cautious tone.
    Nov 21, 2014. 12:21 PM | 1 Like Like |Link to Comment
  • InvenSense In The Short And Long Terms [View article]
    It was pretty much all review and confirmation of steps I've already predicted.

    They mentioned that there could be some continued inventory write-down, though not as bad as the last report. Also continued margin pressure, from Samsung & Apple, but all that has already been discussed.

    The most interesting points to me are that management sees:

    Us still being a couple of years away from wearables really picking up. Not sure I agree there.

    No new acquisitions for the next year, which I was assuming given that they've already burned through a good chunk of their balance sheet. See my prior article on that.

    The eventual commoditization of the MEMs supplier market, indicating that they don't really have IP protection on their fabrication processes, which is why they are evolving to SoC and software.
    Nov 21, 2014. 12:05 PM | Likes Like |Link to Comment
  • InvenSense In The Short And Long Terms [View article]
    I hope you're right about the 13.50 lows, but the data points to you being wrong about everyone having already sold. In many cases, there may not even be a choice. See my comment above.
    Nov 21, 2014. 08:45 AM | Likes Like |Link to Comment
  • InvenSense In The Short And Long Terms [View article]
    Well, they might have been when they sold the put, and it generally stays that way if the stock price is close to the strike price. In this case, though, the stock price is over 25% below the average strike price and details of the Apple deal are showing that the fundamentals aren't what people thought they were, and won't support a rise back to the strike price in the near term. Year-end window dressing, where people take a loss to offset other gains, may exacerbate matters and be particularly potent for two reason:

    1. The Nasdaq has risen almost 20% in the past year, and 86% in the past three. Many will have gains to offset, and many more could and should be concerned about the broader market movement.

    2. There is huge tax uncertainty looming for next year due to Congressional deadlock, which will push investors to settle accounts before year end.

    In some cases, though, there simply won't be a choice. Investors who have over-committed will be receiving margin calls resulting in forced sales. All that might be weathered if the stock were clearly a value by current or predictable metrics. Marings WILL improve, but my most optimistic projections for 2015 would have INVN shares earning 60 cents each for the year. At a PE of 20 that's $12, and 20 is high for a FORWARD PE. Analyst estimates for 2015 average 45 cents, which would put INVN at $9 with the same PE. I don't think it will get that low, but you can see why people might not choose to hold on, even if they have a choice.

    Over the longer run, it will take new products and new business to reach my price targets. There are no more big customers like Apple left to gain. As we've seen, maybe that's not such a bad thing, but it means that rebuilding earnings is going to take time.
    Nov 21, 2014. 08:40 AM | Likes Like |Link to Comment
  • The Broader Effects Of Imminent Sales Tax Reform [View article]
    I guess it was unrealistic to expect Congress to accomplish anything at all. It's looking the MFA won't be introduced in the lame duck session:

    http://bit.ly/1BSwLEE
    Nov 20, 2014. 11:49 PM | Likes Like |Link to Comment
  • Amazon Delta: One Last Hope Or The End Of An Era? [View article]
    One development pushing Amazon towards the One Last Hope scenario is that the MFA probably won't be introduced in the lame duck session:

    http://bit.ly/1BSwLEE

    See the article and comments linked above for more explanation.
    Nov 20, 2014. 11:45 PM | Likes Like |Link to Comment
  • Amazon's Most Important Event Comes The Week After Earnings [View article]
    It's looking the MFA won't be introduced in the lame duck session:

    http://bit.ly/1BSwLEE

    which in turn means the issue is likely to be tabled until some sort of comprehensive tax reform can be addressed.
    Nov 20, 2014. 11:43 PM | Likes Like |Link to Comment
  • InvenSense In The Short And Long Terms [View article]
    It's lower total system power. The point is, it's meant to be always on, which is why there's also slower wake time. Apple is used to using its M7 sensor hub approach, though, which is also always on and probably drawing much more power. They would probably have to rework a lot to ditch the M7, thus the kludge.
    Nov 20, 2014. 11:36 PM | 2 Likes Like |Link to Comment
  • InvenSense In The Short And Long Terms [View article]
    I've expressed confidence that InvenSense will be in the Apple Watch, but not everyone agrees. The chips are typically referred to as n-axis devices. The InvenSense part is a 6-axis device and Bosch has 3. Most of the media has echoed statements that Apple's inclusion of both devices is an example of "elegant" engineering to save power. I'm not so sure about that. I've said before that I think it may be more of kludge. The InvenSense device actually has a lower power mode than the Bosch one, and I wonder if Apple simply wasn't ready to use the full functionality. To that end, you could have a point about the watch not needing much, but InvenSense leads in total power consumption profile (see comments prior articles). I just spoke to a developer today who was unhappy with the reduced functionality in the SDK for the watch and noting that it seems to confirm that saving power is primary concern.
    Nov 20, 2014. 10:20 PM | 1 Like Like |Link to Comment
  • Corning launches Gorilla Glass 4 [View news story]
    Thanks, I hadn't seen that. It's just too brittle for sheets that size, though, which speaks to the points in my AAPL article about really reaching to differentiate its products.
    Nov 20, 2014. 07:52 PM | Likes Like |Link to Comment
  • Corning launches Gorilla Glass 4 [View news story]
    I doubt that Sapphire was ever really intended for the latest iPhones. It's not very suitable for the purpose and both Apple and GT should have known that. Sapphire only ever really made sense for smaller form factors like wearables. See my Balance Sheet article for a link to my warnings on this subject, long before the trouble became clear to everyone. My AAPL article also has updates on how that situation has evolved
    Nov 20, 2014. 07:16 PM | 1 Like Like |Link to Comment
  • InvenSense In The Short And Long Terms [View article]
    The headline here says CCS Insight predicts that wearable will "fall flat" in 2015:

    http://bit.ly/1r24em4

    Further reading seems to indicate that they think the market will remain very fragmented for the next couple of years. I agree with the latter perspective.
    Nov 20, 2014. 06:47 PM | Likes Like |Link to Comment
  • InvenSense In The Short And Long Terms [View article]
    Them getting there depends on the pace of wearable adoption and new SoC products. I think both will happen, so I'm not rescinding the price target, but it didn't seem appropriate to focus too much on that when I think there may be more pain in the next month.

    Back when people were giving me grief about being bearish in the face of an impending Apple deal, I kept saying that I'd have to see the terms of that deal. The first peeks behind the curtain aren't looking so good.
    Nov 20, 2014. 06:44 PM | 3 Likes Like |Link to Comment
  • Update: Advanced Cell Technology Interim Results And Shelf Offerings [View article]
    We've never known exactly what the deal with LP is. We know that shares are sold to them BASED ON market value. That could mean at half of market value.

    Regardless, I don't see what's so hard to understand about the idea that they can't sell 10M in one shot to LP, because LP can't turn around and sell that many to the market without crashing the price. Press releases have said that ACT controls the timing and amounts, but I simply don't believe that means that LP has no ability to limit how much they buy at any given point. No entity would agree to that unless they were getting shares at a VERY substantial discount.
    Nov 20, 2014. 04:18 PM | Likes Like |Link to Comment
  • InvenSense In The Short And Long Terms [View article]
    Yes, we know Apple sold 10M in the first weekend, and as per the article, 39.3 in the quarter ended Sept. Your figures pretty much jive with the high end of my range. I don't think we'll ever know the terms of delivery, but we can infer a lot from revenue and end-product sales figures.

    I think you've got it backwards, though, the shorter the lead time and the larger the # of new models sold, the worse it is for InvenSense, because that implies a lower price per part. That's why I included the 60 cents per part figure, if Apple had pre-built, and InvenSense had recognized revenue for all 39.3M phones. That would be a terrible deal for InvenSense, and we don't even have any guarantee that it's not worse than that. The delay in delivery speaks against it being worse, but it's still tough to be sure at this point. The next quarterly reports from both companies will be very important indeed!
    Nov 20, 2014. 04:09 PM | Likes Like |Link to Comment
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