Intel buying Mobile Eye for $15.3 billion

[Puffnstuff]

I just came across this story on CNBC and the diversification continues at Intel. Apart from wanting to get into autonomous tech what else do you think their motivations could be? Seems like they've made some bad investments in recent years and I'm wondering if this one can be added to that list.

 

[MomentsofSanity]

I think that is exactly what their motivation is. They see where technology is going and MBLY is on the forefront of that technology with their chip-based camera systems.

 

[mxnerd]

Maybe AMD should also buy another driverless technology company to compete with Intel.

 

[Thump553]

It's proof certain that I'm out of touch in the tech world when a company I never heard of is worth 15 billion.

 

[Puffnstuff]

It's proof certain that I'm out of touch in the tech world when a company I never heard of is worth 15 billion.

That figure falls within the range that Intel has been shelling out for acquisitions in recent years.

 

[mxnerd]

It's proof certain that I'm out of touch in the tech world when a company I never heard of is worth 15 billion.

I'm sure it's more valuable than that $28 billion Snapchat.

 

[Genx87]

Everybody throwing money at the newest disruptive technology hoping something sticks.

 

[Commodus]

For Intel, this is really about putting eggs in more than one basket, like the OP said. The PC sales decline over the past few years has made Intel realize that it can't coast on computer processor sales forever (it certainly can't rely on phone chips, either). Self-driving cars are a way of keeping Intel relevant even if PC sales have permanently stagnated.

 

[First]

^ Yeah but this one seems sure to stick. MobileEye is pretty much the go-to in this space.

 

[senseamp]

Overpaid by at least a factor of 2, probably 5.
Enterprise Value by Revenue of 28 vs 3 for Intel itself.
But this is modern day Intel for you. No ideas, just spending a bunch of money to remain relevant.

 

[agent00f]

Really silly acquisition given there's zero synergy with their core competency of pricey high IPC general purpose chips.

The only potential "value" here is keeping tech out of competitor hands, but it's not as if the sw/algs underlying this is some great big secret, or there's any early mover network advantage like with the social apps.

 

[senseamp]

I predict that $10B of this will be written off and Krzanich will be shown the door in a couple of years. Intel stock has already priced $5B of the write-off today.