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I don't think they are in any danger of bankruptcy. Whether they return to profitability is still an open question but it seems likely that they should be by so
by tcoppi 10y ago
I don't think they are in any danger of bankruptcy. Whether they return to profitability is still an open question but it seems likely that they should be by some point next year. How profitable, and what happens after that, is anyone's guess. There is a lot of room to grow in the graphics and CPU space, but they have tough competitors. I do think their stock is very fairly valued at ~$6 though, I think any potential gains from Zen over the next year or so are priced in to that. It definitely isn't a value buy anymore.
Edit: As the day goes on it seems like they're trading back over $7, so obviously the market disagrees with me :) They were trading around $10 before losing profitability, and in the $20-$40 range during their mid-2000s heyday, so maybe the market is expecting performance closer to that. I think that is optimistic still, but again who knows.
- blueprint 10y agoIMHO it's not actually possible for something to ever be 100% priced in, which has the surprising meaning that people need to also discuss how much of an event is priced in when they speculate whether something is or isn't priced in.
- eximius 10y agoWhy is it impossible?
- blueprint 10y agoIt can be virtually guaranteed that not everyone who might buy or sell will know about and properly understand a given event.
- eximius 10y agoPeople can be correct for the wrong reasons, though. Wisdom of the crowds (and the Central Limit Theorem) would make me expect that it would be very close is most cases, with random noise being the most common distance from the truth.
- deleted 10y ago[deleted]
- vanattab 10y agoCan you elaborate on your meaning?
- blueprint 10y agoPlease see my reply to eximius.
- deleted 10y ago[deleted]
- Obi_Juan_Kenobi 10y agoPeople tend to ignore the inherent risk of time when considering something 'priced in'. If an event is set to happen in an hour, you can be fairly certain it will happen, so it should be strongly 'priced in'. If it's happening months or years out, a lot could happen in the meantime, thus it's not 'fully' priced in. It's not a discrete event, but rather some sort of curve (perhaps sigmoid?) that depends on perceived risk.