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Tue, Feb. 2, 10:25 AM
- Roth Capital's Brian Alger has launched coverage on Mellanox (MLNX +3.7%) with a Buy rating and $60 target. He praises the company for having an end-to-end line on InfiniBand/Ethernet connectivity offerings, and declares it well-positioned to outpace peers.
- The call comes less than a week after Mellanox rallied in response to a Q4 beat and strong Q1 guidance. Shares are at their highest levels since October, and about $5 removed from a 52-week high of $52.77 (set in June).
Thu, Jan. 28, 9:23 AM
- Gainers: NEOS +59%. DNR +17%. BCEI +16%. UA +16%. FB +14%. INO +13%. ATHX +12%. PBR +12%. WLL +11%. MRO +10%. [[PBR-A]] +10%. TRXC +9%. CHK +9%. MLNX +9%. LINE +9%. MT +9%. SDRL +8%. HOG +8%. ETE +8%. STO +8%. CRUS 7%. KMI 7%. BBL 6%. HCA 6%. MJN 6%. CJES 6%. PYPL 6%.
- Losers: NOW -22%. OSIS -22%. EBAY -11%. INVN -10%. URI -10%. INCY -9%. JNPR -10%. OAS -7%.
Wed, Jan. 27, 5:40 PM
Wed, Jan. 27, 5:12 PM
- In addition to beating Q4 estimates, Mellanox (NASDAQ:MLNX) is guiding for Q1 revenue of $180M-$185M, soundly above a $171.4M consensus. The outlook doesn't account for any revenue from Mellanox's pending acquisition of EZchip, which is expected to close in the second half of February; revised guidance will be given once the deal closes.
- CEO Eyal Waldman: "We saw strong growth in our Ethernet business in 2015, and expect it to accelerate in 2016 and beyond. We are pleased to see our InfiniBand business continue to grow across multiple markets and technology generations, with strong adoption of our EDR 100 Gigabit InfiniBand products." Mellanox's report comes 12 days after shares fell sharply in response to Intel's Q4 report, in which the chip giant reported server CPU division sales growth had fallen to 5% Y/Y.
- Mellanox has risen to $42.00 after hours.
- Mellanox's Q4 results, earnings release
Wed, Jan. 27, 4:10 PM
Tue, Jan. 26, 5:35 PM| Tue, Jan. 26, 5:35 PM | 26 Comments
Tue, Jan. 19, 2:46 PM
- At an EZchip (EZCH +1%) shareholder meeting, 84% of votes were cast in favor of Mellanox's (MLNX -0.9%) $25.50/share, all-cash, deal to acquire EZchip.
- The deal is expected to close in the second half of February. Top EZchip shareholder Raging Capital gave its support earlier this month, after a go-shop period ended without a superior offer arriving. EZchip now trades $0.21 below Mellanox's buyout price.
- Separately, Mellanox has affirmed its Q4 guidance ahead of its Jan. 27 Q4 report. Shares fell hard last Friday after Intel reported slower-than-expected Q4 server CPU division sales growth (5% Y/Y vs. 12% in Q3).
Fri, Jan. 15, 2:53 PM
- In Wall Street's latest bloodletting, the Nasdaq is down 3.1% and the S&P 2.4%. The decline comes amid tumbling energy prices (crude is below $30/barrel), soft macro data, and disappointing earnings reports from the likes of Intel and Citigroup.
- Tech companies seeing outsized losses amid the carnage include chipmakers NXP (NXPI -8.1%), Qorvo (QRVO -8.9%), InvenSense (INVN -3.7%), IDT (IDTI -6.4%), Sigma Designs (SIGM -6.5%), and Knowles (KN -6.6%), as well as solar plays Trina (TSL -9.3%), ReneSola (SOL -11.5%), JinkoSolar (JKS -10.7%), Enphase (ENPH -8.5%), and Canadian Solar (CSIQ -8.4%).
- Also off sharply: Action camera leader GoPro (GPRO -8.7%), 3D printer maker 3D Systems (DDD -7.5%), daily deals leader Groupon (GRPN -6.4%), server interconnect provider Mellanox (MLNX -8.5%), OLED materials/IP provider Universal Display (OLED -10.3%), Latin American online marketplace MercadoLibre (MELI -7.2%), data management software firm Varonis (VRNS -8.3%), ad tech firm Rocket Fuel (FUEL -7.1%), Chinese online retailers Vipshop (VIPS -6.9%) and Jumei (JMEI -12.7%), and home automation system provider Control4 (CTRL -7.8%).
- GoPro is down 22% since issuing a Q4 warning on Wednesday afternoon. Trina has been downgraded to Neutral by Goldman. IDT and Mellanox could be affected by the weaker-than-expected Q4 sales reported for Intel's server CPU division (DCG).
- Previously covered: Chip equipment makers, Yandex/Qiwi, Intel, Textura, PC industry firms, Rackspace, CommVault, Ericsson
- Wednesday's notable decliners
Mon, Jan. 11, 10:41 AM
- Mellanox (MLNX +4.2%) got an upgrade from Credit Suisse from Neutral to Outperform
- Credit Suisse analyst John W. Pitzer maintained a $50 price target, arguing the EZchip Semiconductor acquisition will boost long-term revenue CAGR to 20%-25%, while dismissing worries of Intel entering the market.
- Pitzer also argued the interconnect IP market will support a long-term revenue CAGR of 15%-20% on a TAM of about $8.2B - expected to grow 20% in the next year.
- Shares are down 15% over the past year, with 4.4% losses for 2016 already.
Thu, Jan. 7, 9:35 AM
- Raging Capital said it supports the merger between EZchip (NASDAQ:EZCH) and Mellanox (NASDAQ:MLNX), recommending all shareholders approve the deal. “Through our efforts, EZchip and Mellanox agreed to amend their merger agreement to provide for a Go Shop process, but no superior offer emerged from that process...Consequently, under the current circumstances, we believe the best available option for EZchip's shareholders is to accept the transaction with Mellanox,” Raging Capital said. The go shop process ended with no deal made.
- The activist shareholder previously opposed the deal, stating a $25.50 buyout price was too low.
- While the deal price was not raised, Raging Capital said a provision to allow for alternative offers made them soften their position. “As Raging Capital has articulated previously, we believe EZchip has leading edge technology, and is well-positioned to capitalize on the emerging trends of SDN/NFV and white box networking and we believe EZchip is worth more than $25.50 per share. Through our efforts, EZchip and Mellanox agreed to amend their merger agreement to provide for a Go Shop process, but no superior offer emerged from that process.”
- EZchip will have a shareholder meeting on January 19th to vote on the deal.
Dec. 16, 2015, 9:21 AM
- "None of the parties that had been contacted submitted a proposal to acquire the Company, and no other party approached either EZchip or Barclays expressing an interest in exploring a purchase of the Company," says EZchip (NASDAQ:EZCH) about a go-shop period - granted by Mellanox (NASDAQ:MLNX) last month as part of a revised deal agreement - that began on Nov. 17 and expired this morning.
- As a result, EZchip will move forward with a Jan. 19 shareholder meeting to vote on Mellanox's planned $25.50/share acquisition of the company. A conference call discussing the go-shop period and providing a business update will be held at 10AM ET tomorrow (webcast).
- EZchip's shares closed yesterday $1.19 below Mellanox's buyout price. They're currently unchanged premarket.
Nov. 17, 2015, 8:25 AM
- Four days after EZchip (NASDAQ:EZCH) announced it's postponing a shareholder vote on Mellanox's (NASDAQ:MLNX) planned $25.50/share ($811M) acquisition of the company and has been offered a 30-day go-shop period and termination fee waiver, the company states it has signed off on the revised agreement.
- Should no superior offer arrive during the go-shop period, EZchip shareholders will vote on the deal at a Jan. 19 meeting (Dec. 18 record date). EZchip sees the deal closing in Q1.
- With shares having closed yesterday at $24.04, EZchip remains 5.7% below Mellanox's offer price.
Nov. 16, 2015, 5:53 PM
- Intel (NASDAQ:INTC) has used the supercomputer industry's SC15 conference to unveil SSF, a high-performance computing (HPC) system architecture meant to make HPC deployments easier for enterprises that have remained on the fence to date.
- Intel notes HPC deployments, a bright spot in a soft enterprise server market, have expanded beyond traditional use cases such as DNA sequencing, nuclear simulations, and weather modeling to cover a variety of corporate analytics workloads. The company argues a system-level approach will help eliminate system bottlenecks, and allow enterprises to use a common infrastructure for numerous HPC and non-HPC workloads.
- Central to SSF is Omni-Path (OPA), a high-speed interconnect fabric for HPC server nodes (first outlined by Intel a year ago) running on Intel CPUs. OPA is promised to enable switches that are both cheaper and more power-efficient than ones relying on InfiniBand interconnects (widely used in HPC deployments). Dell, HP, Lenovo, and many other OEMs plan to offer OPA-based switches and servers, which are expected to ramp in early 2016.
- Mellanox (NASDAQ:MLNX), the top player in the InfiniBand interconnect market, is in the crosshairs. Earlier today, Mellanox announced Switch-IB 2, an InfiniBand switch supporting 100G port speeds and (notably) embedded processing power for offloading communications tasks from server CPUs.
- Along with SSF, Intel has announced Knights Landing, the latest entry for its Xeon Phi co-processor line, will be generally available in Q1 2016; Intel was previously aiming for a late 2015 launch. Knights Landing features 72 CPU cores and 16GB of on-package DRAM, and promises big performance gains over the current-gen Knights Corner. It takes aim at Nvidia's (NASDAQ:NVDA) Tesla GPU line, which remains the biggest player in the HPC co-processor market.
- Aside from potentially growing the HPC market, SSF/Omni-Path could boost Intel's dollar content for various enterprise server deployments, as it continues pursuing a 15% Data Center Group revenue CAGR through 2018. Altera, whose FPGAs can be paired with Xeon CPUs to accelerate HPC workloads (among other things), could also aid in boosting dollar content.
Nov. 12, 2015, 10:53 AM
- Following pressure from activist Raging Capital to get a better deal, EZchip (EZCH +2.6%) has postponed a shareholder vote on Mellanox's (MLNX +0.9%) planned $25.50/share ($811M) acquisition of the company. The vote was set for today's shareholder meeting.
- In addition, Mellanox has granted EZchip a 30-day go-shop period to solicit alternative bids, and has waived its rights to a deal termination fee.
- Mellanox is affirming its $25.50/share, all-cash, offer. EZchip has risen to $24.55 on today's news.
Nov. 5, 2015, 3:12 PM
- Mellanox (MLNX -1.7%) is off moderately after EZchip (EZCH -0.2%), which Mellanox is set to acquire for $811M (provided shareholders approve), posted nearly in-line Q3 results and guided for Q4 revenue of $25M, below a $33.1M consensus. The network processor vendor attributes the outlook to "near-term inventory adjustments across several key customers that are serving the carrier networking space," and insists it isn't reflective of the company's long-term outlook,
- However, with major shareholder Raging Capital continuing to oppose Mellanox's planned acquisition of EZchip, EZchip is using the guidance to argue in favor of the Mellanox deal. "The fully financed, all-cash, $25.50 per share offer from Mellanox provides EZchip shareholders with immediate and certain cash value. This is in contrast to the headwinds a standalone EZchip could face as we continue to witness further industry consolidation and the moves of major customers toward in-house production for NPS-400 functionality."
- EZchip has also issued a new PR making a case for a "Yes" vote. Shareholder advisory firm Glass Lewis opposes the deal, while peers ISS and Entropy are in favor of it.
- Thanks to fears the deal could fall through, EZchip is trading at $24.24, 5% below Mellanox's buyout price.
- EZchip's Q3 results, PR
Oct. 21, 2015, 5:31 PM
- In addition to beating Q3 estimates, Mellanox (NASDAQ:MLNX) is guiding for Q4 revenue of $171M-$176M, favorable at the midpoint to a $171.9M consensus and going over well in light of worries about weak enterprise server demand.
- Boosting Q3 EPS: Gross margin was 72.9%, +20 bps Q/Q and Y/Y, and above guidance of 71.5%-72.5%. Q3 GM guidance is also at 71.5%-72.5%. Operating expenses are expected rise 1%-4% Q/Q. They rose 29% Y/Y in Q3 to $88M.
- CEO Eyal Waldman suggests demand for Mellanox's Ethernet connectivity hardware is strong among major Web/cloud service providers. "We are seeing revenues from our 10, 25, 40, 50 and 100 Gigabit Ethernet solutions and traction with large data center customers for these products. We are happy to see our EDR 100 Gigabit InfiniBand revenues growing at a faster pace than FDR did, to approximately 12 percent of InfiniBand revenues."
- Shares have risen to $44.80 after hours.
- Q3 results, PR
Mellanox Technologies Ltd designs, manufactures and sells interconnect products and solutions that facilitate data transmission between servers, storage systems and communications infrastructure equipment and other embedded systems.
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