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Having watched most of the GamersNexus video, my takeaways were: - Will maintain some stock for RMAs - Made pre-production boards for 4xxx, will not manufactu
by ribosometronome 4y ago
Having watched most of the GamersNexus video, my takeaways were:
- Will maintain some stock for RMAs
- Made pre-production boards for 4xxx, will not manufacture
- 3080 and above are not profitable for EVGA
- NVIDIA is not transparent about pricing with board manufacturers, they find out MRSP same time we do
- NVIDIA limits MSRP heavily on cards so they can't do things to sell more profitable higher end cards
- It sounds like (this is my takeaway from GN's description, not their words) EVGA's CEO is tired of dealing with NVIDIA, wants to refocus on family, and there isn't a clear person to replace him and hesitant to sell to people who would mistreat employees/cut corners/damage brand.
- Will continue selling power supplies
- No plan to work with AMD or Intel making boards, CEO sounded dismissive toward it
- renewiltord 4y agoSummary strongly appreciated. Thank you very much.
- VikingCoder 4y agoIn case the CEO is reading this - Turn it into a employee-owned company!
- thfuran 4y agoI don't think that's actually easy to do without causing all current employees to incur significant taxes.
- pessimizer 4y agoIt's also difficult to win the lottery without incurring significant taxes.
- ska 4y agoIn that case by definition you have the cash to pay the taxes.
- Tuna-Fish 4y agoNo, you don't. The issue is liquidity. If I gift you something that is of substantial value, but cannot be easily sold or used as a security, it can really fuck you over. There are jurisdictions that allow deferring the tax liability in such cases, but the USA doesn't do that.
- xboxnolifes 4y agoLottery winnings are liquid.
- Tuna-Fish 4y agoAh sorry, I misunderstood the post I was replying to. I was actually agreeing to it: Lottery winnings are different from major gifts of illiquid assets, because you can always just pay the taxes from the winnings. In any case, you become liable for the tax immediately after receiving the gift/winning. If you cannot do that without selling the asset, and the asset is impossible to sell in the short term, and you cannot take a loan against the asset, your best option can be to refuse the gift. And yes, this is a little bit insane.
- ska 4y agoI should have been clearer, but we were pointing out the same difference.
- deleted 4y ago[deleted]
- alasdair_ 4y agoGifts in the usa are taxable to the giver, not the receiver. (In most cases)
- babypuncher 4y agoThe difference is that lottery winnings are liquid, you can just pay your tax burden out of the winnings.
- iepathos 4y agoSimilarly, taxes are applied to capital gains when stock is sold, not when it is received or bought. The employees would not be taxed just for receiving the stock/ownership, only once they sold it and made it liquid.
- deleted 4y ago[deleted]
- double_nan 4y agoTaxes are due at vesting.
- davidlumley 4y agoTo be clear: taxes are due when you receive the shares. For options, that's when you execute/purchase your options not when they vest. edit: (in the US at least)
- johnebgd 4y agoThe taxes can also be due when you receive your options. That can depend on if you purchase your options or if they are granted to you and entitle you to a discount. YMMV but an NQSO purchase agreement can be your friend.
- girvo 4y agoNo, you can absolutely be taxed just for receiving the stock/ownership.
- ideamotor 4y agoIf it’s not worth much and it’s spread across many employees, we aren’t talking about much.
- kennend3 4y agoDepends on your tax laws. Here (Canada) lottery winnings are tax-free ;) https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/amounts-that-taxed.html https://www.canada.ca/en/revenue-agency/services/tax/individ...
- Havoc 4y agoThrow enough lawyers and structuring at it and you can definitely make it work. Not make the tax go away permanently...but phase it over time & ensure they get dividends along with it to cover bill etc.
- rch 4y agoExactly. I've had enough theoretical conversations about this to know there are organizations who would be happy to help assess any particular situation. Different industry, but it might be worth looking into how New Belgium went employee owned, with apparently equitable results: https://www.forbes.com/sites/christophermarquis/2020/05/01/employee-ownership-results-in-a-pay-out-of-more-than-200-million-to-workers/?sh=1bbdee8e1502 https://www.forbes.com/sites/christophermarquis/2020/05/01/e...
- VikingCoder 4y agoI know nothing... ...but give the current employees voting rights without equity, proportional to their seniority... (Or just 1 vote each.) And then start rolling out equity, maybe, depending.
- moffkalast 4y agoTaxes? You mean the thing poor people pay? /s
- vineyardmike 4y agoI’ve heard of companies doing something similar, but instead it’s a special class of stock (and the original one gets phased out through buybacks etc). This new class basically has a one time dividend that covers a chunk of taxes. Not sure in EVGAs case what laws govern their business and where employees are and what existing structure is… but where there’s a will, there’s a lawyer to make a way.
- s1artibartfast 4y agoI don't think that is true. There are a number of paths to convert to a employee owned coop that doesn't incur taxes for the employees. Easiest would be to convert to some sort of new 501 non profit with employee control. People don't have to pay taxes when they are hired at an employee owned company like winco, and students don't have to pay taxes when they join a housing coop.
- gnarbarian 4y agoOK, but they will still need a CEO.
- black_puppydog 4y agoYes but the CEO's role would be very different.
- yieldcrv 4y agoif anyone needs any inspiration, in Germany the company's employee labor union has a board seat or two, by law (for share based companies above a certain size). I just never see anything remotely close to that in the US discussions, by the people most interested in employee activism or union formation. I get the impression people don't even know its something to they could be putting energy towards. first English google result I could find on the concept https://www.worker-participation.eu/National-Industrial-Relations/Countries/Germany/Board-level-Representation https://www.worker-participation.eu/National-Industrial-Rela...
- brnaftr361 4y agoAt every opportunity I drop Mondragon corporation. They have a long and impressive history, BBC had a documentary on it, which despite being filmed in the '80s, and worthless to them is being withdrawn from Youtube due to IP. Very interesting if you can find it, but most of anything I've seen written about the topic is. Actually: The Mondragon Experiment: https://vimeo.com/161252994 https://vimeo.com/161252994
- despacito 4y agoHoneycomb does this as well https://www.honeycomb.io/blog/employee-representative-board-of-directors/ https://www.honeycomb.io/blog/employee-representative-board-...
- bhhaskin 4y agoHow so?
- spoils19 4y agoAll companies are employee owned. Vote with your feet.
- mceachen 4y ago> All companies are employee owned False. Only a few are: https://en.wikipedia.org/wiki/List_of_employee-owned_companies https://en.wikipedia.org/wiki/List_of_employee-owned_compani...
- notafraudster 4y agoThe person you're responding to is not speaking literally; they're using what's called a metaphor to make a point that employees of any company exert walking power. The point may or may not be useful, but you have to finish reading the post before trying to reply with a gotcha correction.
- ClumsyPilot 4y agohas this power ever brought down a company? Has it made bosses responsible for worker injuries at work? Has it given maternity leave? if not, its not really power
- tssva 4y agoIt has.
- s1artibartfast 4y agoIt certainly has. Employees have real power. Power is not the same as ownership
- fabianhjr 4y ago> they're using what's called a metaphor It isn't a metaphor, it is, in the words of Zizek, pure ideology.
- sitkack 4y agoThey are such good board designers, they should open a design service.
- halotrope 4y agoThank you. One addition: - Video cards are 78% of revenue for EVGA.
- liquidise 4y agoI think this was 78% of gross revenue. As OP stated, the GN video makes it clear that the margin on this was, in many cases, negative.
- halotrope 4y agoThank you for the clarification!
- avidphantasm 4y agoIs pulling out of video cards now related to Etherium switching to POS? As in, downward pricing pressure for GPUs means they’ll never see positive margins in the foreseeable future? That combined with NVIDIA being hard to deal with makes it not worth it?
- IncRnd 4y agoNot in the slightest. Even if there were no crypto mining, videos cards would all still get purchased.
- mbreese 4y agoMaybe… depends on how many they make. If there is an oversupply, margins will still suffer.
- geraldwhen 4y agoPrices are in free fall and cards sit. 3090 ti is down to $1000 new. At the height of mining, a 3090 went for $3400.
- paulmd 4y ago> As OP stated, the GN video makes it clear that the margin on this was, in many cases, negative. No - the margin is in many cases negative, right now, with high-end GPUs 50% below MSRP. This is an important distinction. Margins were great for 2 years, EVGA's GPU department made tons of money during that time even with a few gestures towards the public. He lost tons of money during those years with frivolous, high-R&D, high-ongoing-support-cost ventures like entering the motherboard and enthusiast monitor market.
- deleted 4y ago[deleted]
- ramesh31 4y ago>It sounds like (this is my takeaway from GN's description, not their words) EVGA's CEO is tired of dealing with NVIDIA, wants to refocus on family, and there isn't a clear person to replace him and hesitant to sell to people who would mistreat employees/cut corners/damage brand. So they're voluntarily choosing to go out of business..? How does that work?
- ribosometronome 4y agoFrom other comments, ditching 78% of their revenue but not going out of business. They still make power supplies. I think the CEO sees it as exiting a unpredictable market where they have little control over what they sell.
- deleted 4y ago[deleted]
- 7speter 4y agoThey also make top of the line priced motherboards, seemingly for enthusiasts.
- throwaway5959 4y agoThey’re not publicly traded. That’s how. They can do whatever they want within the letter of the law and aren’t beholden to shareholders.
- NavinF 4y agoI think you're implicitly assuming the employees want to work there forever. The CEO told GN there won't be another round of layoffs; Instead there will be voluntary attrition. Pretty sure the implication is that everyone there, not just the CEO, is burned out after 2 years of covid, supply chain issues, and dealing with Nvidia. Employees are planning to leave regardless of EVGA's plans so it doesn't make sense to stay in a low margin market.
- rdtwo 4y agoRevenue does not matter on a private company profit is more meaningful. What’s the point of doing 10b in volume if you loose money on it and have no path to profit. It’s smarter to do 1B and make 2-300m profit
- AlexandrB 4y ago> - NVIDIA limits MSRP heavily on cards so they can't do things to sell more profitable higher end cards It's so weird to put a ceiling on card prices. Maybe this was a measure due to the crypto-induced GPU demand?
- foolfoolz 4y agonot weird at all. this is a huge reason for the rpi’s success and look at the last 2 years of nvidia gpus. you mentally associate $1,000+ with any gpu. even 5+ year old models. they want to put an end to that, bad for the brand
- acomjean 4y agoits happening in cars right now. The Manufacturers aren't too happy that some dealerships gouge the customers. Its bad for the brand, though profitable short-term
- sn0wf1re 4y agoCar dealerships don't do significant product modifications like GPU integrators. Unless you consider an undercoat or bedliner to be significant modifications.
- izacus 4y agoMost GPU integrators just resell reference boards with RGB leds.
- mbreese 4y agoBecause they can’t add anything else… (but I don’t know what else they’d want to add).
- fennecfoxen 4y agoRAM.
- thayne 4y agoFrom what I understand, MSRP is the suggested retail price. Is EVGA contractually obligated to list at that price? And if so, how does that not violate antitrust laws?
- henryfjordan 4y agoIn the US, antitrust doctrine is largely based around preventing dominant market players from causing direct harm to the consumer and does not care much about health of the markets. It is hard to argue that NVIDIA saying "use this price that you think is too low" to EVGA would constitute an antitrust violation when that means lower prices for consumers.
- thayne 4y agoWell, EVGA isn't just reselling Nvidia's product. They are building a new product (a vidio card) that uses Nvidia's product (the GPU itself). So by setting a price ceiling, they prevent card makers for making higher end cards with more features and/or higher quality. And I would argue that preventing the existence of a product that consumers might want hurts some consumers at least.
- chii 4y ago> And I would argue that preventing the existence of a product that consumers might want hurts some consumers at least. unfortunately, a product that doesn't exist isn't really a harm, it's hypothetical harm at best, which would be really difficult to argue as monopolistic. I actually think this business agreement ending is a good thing - it gives AMD and other card manufacturers a way to get in, and compete with nvidia. In the short term it might hurt, but long term is better.
- indymike 4y agoEVGA is not obligated to allow the retailer to sell using EVGA's trademark, or give access to reseller pricing if the retailer does not follow their terms and conditions on advertised price. The retailer actually can sell at lower prices, so long as it is not advertised. This is why you see weird "log in to see price" online or "call for pricing" in print.
- qzw 4y agoI'm sure NVIDIA is a serious pain in the ass to deal with (Linus_middle_finger.gif), but perhaps one of the unspoken reasons is that, as suggested by the rumor mill, there's a serious oversupply problem with next gen GPUs. NVIDIA and AMD placed orders with the foundries based on the ridiculous demand levels they were seeing in the last couple of years, but now demand has cooled off from both crypto (Ethereum merge) and gamers (waiting for new gen), so there's still plenty of current gen stock sitting around. Supposedly they tried to cancel some of the volume with the foundries, but were not allowed to. So maybe EVGA is seeing the writing on the wall and getting out ahead of the game. I'm sure putting up with all of NVIDIA's crap is barely worth it even when making a decent profit. But it's definitely not worth it to EVGA if their cards will just to end up languishing in the bargain bin along with everyone else's.
- mattigames 4y agoWho would have imagined that adjusting your production rates over the most volatile and unstable asset AKA Cryptocoins would be a bad idea.
- KptMarchewa 4y agoAnd that's the second time they've done this, after 2018 crypto crash.
- paulmd 4y agothird. there was another mining boom back in 2014 when it was bitcoin being gpu-mined. It fucked with AMD's Hawaii/290X launch really badly back then - the cards were unobtanium for months and months which gave NVIDIA an opening to launch Maxwell. Then the prices crashed and miners dumped their inventory, so you had new aftermarket 290Xs being sold for $250-300 to try and compete with mining cards, with used/refurb 290 non-X bottoming out around $175. I'm sure the idea that infinity cache decreases the relative mining performance was in everyone's minds at AMD when they were designing RDNA2 - by that point they'd had two major launches (vega too) fucked up by mining, and using more cache/less VRAM bandwidth makes your mining performance worse relative to raster, because mining loads aren't cachable.
- TheRealPomax 4y agoIf their CEO wants to refocus on their family, there's a super easy way to do that: you step down, either to a position that lets you spend more time with your family, or by just leaving the company. A CEO doesn't run the company, the board does. If the CEO wants to spend more time with their family, that's their call to make, but then the board will replace you because you are no longer the best person for the job.
- Beltalowda 4y agoIt's privately owned and don't seem to have a board of directors, and the owner(s) can do whatever they want.
- 0x457 4y agoIt's a privately owned Stock Corporation registered in California. California requires at least 3 directors unless there are less than 3 shareholders.
- deleted 4y ago[deleted]
- abledon 4y agoYou saved a small infants life in the # of cumulative minutes you just saved us by not watching that video, thanks
- danuker 4y agoAlso a lot of energy in avoided video transmission and playback.
- bisby 4y agoHaving watched other coverage, some more takeaways: - Nvidia doesn't give board partners real drivers until they are public. Which is why evga 3090's were bricking themselves at launch, they only had limited pre-release drivers. How can evga make a good product when they don't have dev tools to make the product? - Nvidia doesn't give retail partners prices or info at all until the public has the information, but requires order size estimates long before that. How can retailers predict sales volumes if they don't know price or performance? - Nvidia blacklisted Hardware Unboxed for giving the 3090 positive reviews, but they didn't talk about the proper talking points (8K gaming capability). They don't care about the review or increasing sales, they're actively the top performing GPU, they just care about controlling the narrative and being manipulative. AMD GPU's aren't as good. but Nvidia isn't SO much better that AMD is just full stop not an option. No company is your friend. But Nvidia seems to actively be an enemy to a lot of people, and they would be profitable even if they were nicer, they have the best product. Which means they are just actively bad people.
- paulmd 4y ago> Nvidia blacklisted Hardware Unboxed for giving the 3090 positive reviews, but they didn't talk about the proper talking points (8K gaming capability). erm, more like they got blacklisted because they have continually refused to talk about DLSS or raytracing, not because of 8K. Steve has outright said he doesn't think either of those are valuable features and he won't take them into consideration in the reviews. And DLSS 2.0 was well into the public consciousness at that point too, everyone knew it was much higher quality than the first iteration or other alternatives available on the market (still is better than FSR 2.0 too). So yeah, I imagine that NVIDIA wasn't too happy about an outlet who flaunted the fact that they were choosing to ignore a 30-40% performance and perf/w gain on what was slated to be a pretty broad selection of titles. That basically is a whole performance-segment worth of gain that HUB managed to downplay and minimize and spin. Similarly, on raytracing, even first-gen NVIDIA cards are twice as fast as AMD for a given performance segment. "Hybrid" titles tend to downplay this performance gap due to Amdahl's Law, if only half of your workload is RT then a 2x speed advantage only yields a 50% lead. But, for path-traced retro titles where the workload is 100% raytracing and 0% raster, NVIDIA performs about twice as fast, as do synthetic measurements of raytracing ability (and 3D rendering etc). They quickly walked back the blacklisting, probably someone had a bad day and snapped and committed the worst crime of all: saying what they really think. Because, to be honest this is nothing new for HUB, Tim's content is great but Steve is a bit of an AMD fanboy and it strongly leaks into the editorial positions and the things he chooses to review, which shape the numeric results as well. DLSS was persona-non-grata until FSR 2.0 came out and then it's "well DLSS is great but why not FSR!?". If he'd been saying the "dlss is great" for the preceding year then maybe it would have come off as good-faith, but, it was a shitty low-quality gimmick that nobody should use, up until AMD did something similar and wow it suddenly is great!. And that's just how Steve is, it'll be the same for raytracing... raytracing is just a fad, until AMD finally gets around to a proper high-performance implementation and then it'll be all raytracing all the time. He's constantly downplaying NVIDIA's work, and minimizing and spinning the weaknesses of AMD hardware, which has to be tremendously frustrating for the people at NVIDIA who are supposed to work with him. It's not a popular sentiment with the pro-AMD crowd, but, even among the enthusiast world in general there's growing sentiment that Steve is not on the level, in a way that few other prominent reviewers exhibit. But, you just flat-out won't review the card doing what it's designed to do? Yeah, not sure why NVIDIA would pay to give you a sample of that product, then. "Wow this semi truck sure has shitty track times, and I won't review the hauling capacity because that's just a gimmick, everybody uses minivans". (also, for the record, AMD has a history/pattern of blacklisting reviewers for critical reviews as well... happened to Kitguru a couple years ago, as well as TechOfTomorrow, for similar reasons... he wouldn't benchmark the hardware the way AMD wanted, so no hardware for him. he made a video about that too. Curiously, nobody keeps bringing that up, though...) https://www.kitguru.net/tech-news/announcements/zardon/amd-withdraw-kitguru-fury-x-sample-over-negative-content/ https://www.kitguru.net/tech-news/announcements/zardon/amd-w... https://www.youtube.com/watch?v=4Qflrf6UiWk https://www.youtube.com/watch?v=4Qflrf6UiWk