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Jul. 13, 2015, 10:00 AM
- Marvell (NASDAQ:MRVL) has popped thanks to a vague rumor state-owned Chinese investment firm PDSTI has offered to buy the company.
- This isn't the first time Marvell has jumped on a rumor of Chinese buyout interest. China has been aggressively acquiring chip industry assets over the last 12 months.
- Update: Sources tell dealReporter Marvell has seen interest from PDSTI.
Jun. 25, 2015, 5:35 PM
Jun. 18, 2015, 11:12 AM
- Noting FY16 (ends Jan. '16) EPS estimates have been cut by ~50% over the last 7 months and that Chinese phone sales "improved somewhat" in May, Goldman's Mark Delaney has upgraded Marvell (NASDAQ:MRVL) to Neutral, and hiked his target by $2 to $14.
- Delaney believes mobile baseband ASP/share pressure, SSD controller share loss, and PC hard controller inventory draw-down are priced in. He also expects chip industry M&A to improve pricing.
- At the same time, he argues investor focus will now turn to two issues deemed "difficult to gauge": Whether Marvell will find a strategic option for a baseband unit estimated to burn $100M-$200M/year in cash and hurt annual EPS by $0.20-$0.40, and the outcome of Marvell's Carnegie Mellon lawsuit appeal.
- Morgan Stanley upgraded to Overweight last month following Marvell's mixed FQ1 results and soft FQ2 guidance, and Citi started at Sell.
Jun. 16, 2015, 5:38 PM
May 29, 2015, 11:06 AM
- Believing the company is unlikely to unload its money-losing mobile baseband chip unit (as sought by many on the sell-side), Citi's Atif Malik has launched coverage on Marvell (MRVL -1.9%) with a Sell rating and $13 target.
- Malik: "We do not view MRVL as a viable long-term cellular baseband provider in 4G handset market given fierce pricing competition… and weak positioning at flagship handset makers." He forecasts slow growth in 2015/2016. "After outgrowing the chip industry over? the last ten years by 5 percent, we model MRVL's revenue growth to decelerate and underperform the industry by 3 percent in the next 2-3 years."
- The upgrade arrives 8 days after Marvell provided light FQ2 guidance, and 3 days after Morgan Stanley went contrarian and upgraded to Overweight. Among other things, MS cited optimism about Marvell's Final-Level Cache (FLC) tech, which the company hopes to apply to its mobile processors (among other products).
- Shares joined other chip stocks in rallying this week on hopes Marvell rival Broadcom's merger with Avago will spark more industry M&A.
May 27, 2015, 5:41 PM
May 26, 2015, 9:34 AM
- Believing its risk/reward has become more favorable, Morgan Stanley has upgraded Marvell (MRVL +1.7%) to Overweight 4 days after shares tumbled due to the company's soft FQ2 guidance, and hiked its target by $2.50 to $17.50.
- MS (like others on the sell-side) argues Marvell's earnings would receive a boost if the company exited the mobile baseband processor market - Nvidia became the latest firm to exit earlier this month. It's also upbeat about Marvell's Final-Level Cache (FLC) tech, which places an SSD within a computer's main memory and thereby aims to cut the amount of DRAM needed by a system (inc. mobile devices).
- On its FQ1 CC (transcript), Marvell claimed FLC can allow a hard drive to perform like an SSD 99.9% of the time. "Using this technology, we can now build a 1 terabyte consumer hybrid drive with FLC cache for only $40 of bill of material compared to a 1 terabyte SSD which would otherwise cost $300 of bill of material ... it is not a matter of if but a matter of when the HDD industry adopts our FLC technology to power all of their hard drives." Shipments are expected to start in early 2016.
- MS on FLC's impact on Marvell's baseband ops: "Our view is that the push around the new technology clarifies the management decision-making progress, and is the reason management has been expressing guarded optimism despite more flexible language on long term investment ... if FLC fails to make a difference, we expect the company to cut back investment."
May 22, 2015, 12:47 PM
May 21, 2015, 5:30 PM
- Along with its FQ1 report, Marvell (NASDAQ:MRVL) has announced CFO Mike Rashkin (only took on the job in Dec. 2013, originally as interim CFO) is retiring following 16 years with the company.
- Finance VP Sukhi Nagesh has been named interim CFO while the company looks for a successor.
- Marvell's FQ1 results, guidance/details
May 21, 2015, 5:06 PM
- Though officially missing consensus, Marvell's (NASDAQ:MRVL) FQ1 revenue of $724.3M was near the midpoint of the $710M-$740M guidance range provided in its April 24 warning. However, the company has guided for FQ2 revenue of $710M-$740M and EPS of $0.10-$0.12, below a consensus of $784.3M and $0.16. Some FQ2 weakness was likely expected following the warning.
- Driving the FQ1 EPS beat: Gross margin (non-GAAP) was 51.6%, -20 bps Q/Q (seasonality) but +280 bps Y/Y, and (in spite of the sales warning) above February guidance of 49.5%-51.5%. FQ2 GM guidance is at 49%-51%.
- Also helping: GAAP operating expenses fell 3% Y/Y to $359.9M - R&D spend totaled $280.1M, sales/marketing $36.2M, and G&A $41M. $22M was spent to buy back 1.4M shares.
- Marvell has fallen to $14.00 AH.
- FQ1 results, PR
May 21, 2015, 4:07 PM
- Marvell Technology Group (NASDAQ:MRVL): FQ1 EPS of $0.13 beats by $0.03.
- Revenue of $724.28M (-24.4% Y/Y) misses by $9.55M.
- Shares -4.31%.
May 20, 2015, 5:35 PM
May 15, 2015, 6:05 PM
- After having exited a prior GM position a year ago, David Einhorn's Greenlight Capital bought 9.5M shares of the auto giant in Q1, per Greenlight's Q1 13F.
- Einhorn previously disclosed the purchase, along with his reasoning, in his Q1 letter. "2015 should be a better year for GM: the company is a year closer to eliminating its losses in Europe; low gas prices should stimulate demand for its highly profitable SUV and light truck product lines; raw material costs are low; and we believe that the worst of the product recalls is behind them." He also noted GM's buyback, and called earnings estimates beatable.
- A 1.7M-share stake was taken in Macy's (NYSE:M), and a 1.1M-share stake in Ingram Micro (NYSE:IM). Greenlight's stake in Chicago Bridge & Iron (NYSE:CBI) was more than doubled to 6.7M shares, and its stake in AerCap (NYSE:AER) hiked by 49% to 5.6M.
- On the flip side, Greenlight liquidated a 1.3M-share stakes in Aetna (NYSE:AET) and Amdocs (NASDAQ:DOX). The firm cut its stake in chipmaker/long-time holding Marvell (NASDAQ:MRVL) by 63% to 9M shares, and in chip equipment maker Lam Research (NASDAQ:LRCX) by 33% to 1.7M shares.
Apr. 29, 2015, 9:34 AM
- JMP Securities has downgraded Marvell (MRVL -1.3%) to Underperform 5 days after the company issued an FQ1 warning, and cut its target to $10.
- Craig-Hallum and Ladenburg Thalmann had already downgraded Marvell following the warning. Raymond James has defended the company, arguing its issues are "inventory-related in PCs and demand-related in China’s wireless markets – not market share related." The firm thinks Marvell is still well-positioned to gain hard drive/SSD controller share long-term.
- Benchmark (Hold), on the other hand, is worried Marvell lacks the scale to compete in the R&D-intensive mobile baseband chip market against Qualcomm and MediaTek, that PC weakness will make it tough for Marvell to grow hard drive/SSD SoC sales, and that its "highest volume [Wi-Fi] connectivity design wins are tied to ailing smartphone platform business and/or maturing consumer product cycles (e.g. PS3, Xbox One & Chromecast).”
- With shares having fallen sharply (along with other chip stocks) prior to the warning, they're down less than 3% since it was issued.
Apr. 24, 2015, 5:37 PM
Apr. 24, 2015, 5:32 PM
- Marvell (NASDAQ:MRVL) now expects FQ1 revenue of $710M-$740M, well below prior guidance of $810M-$830M and an $816.3M consensus. All other guidance has been withdrawn.
- The chipmaker blames "weaker than previously expected PC and storage markets and lower than expected emerging market demand." The former is presumably a reference to hard drive/SSD controller sales; the latter might be a reference to Chinese baseband chip sales.
- PC sales were down sharply in Q1, thanks in large part to weak corporate and Japanese demand. Meanwhile, analysts have voiced concerns about soft chip orders from Chinese smartphone OEMs.
- Shares have fallen to $13.50 AH. They fell 1.6% in regular trading after several peers offered soft guidance. Full FQ1 results arrive on May 21.
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