Monday, March 13, 2017

"Mobileye Shares Soar On Intel Acquisition, Citron Shorts Crushed" (MBLY; INTC)

Combined with Citron's "Tesla to $100" call ($243.69 last) and pulling the NVIDIA short rec., the SEC and other people might start thinking Mr. Left is just manipulating stocks for the initial drop caused by his pronouncements.
 Mobileye is up 30% at $61.63, pre-market.

From ZeroHedge:
Update: moments after the initial report, Intel confirmed it would buy Mobileye for $63.54/share representing an equity valuation of $15.3 billion. Intel would use existing cash on hand to fund the acqusition.
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Intel has agreed to buy Israeli technology firm Mobileye for $14-$15 billion according to a report in Israeli financial newspaper TheMarker, sending MBLY shares soaring over 30% higher premarket. An official announcement of the acquisition, the largest ever for an Israeli high-tech company, is expected later on Monday, TheMarker reported on its website. Mobileye, which has been a rumored acquisition target in the past, is a leading supplier of collision-avoidance car sensor systems.

Founded in 1999 with a mission to reduce vehicle injuries and fatalities, Mobileye listed in 2014 on the New York Stock Exchange, where its market cap is $10.6 billion. In 2007, Goldman Sachs invested $130 million in the company.

Intel and Mobileye already collaborate with BMW on a project to put a fleet of around 40 self-driving test vehicles on the road in the second half of this year. BMW announced its partnership with the two firms in July, with the goal of developing the capability of introducing fully autonomous vehicles to the market by 2021.

Intel is betting on Mobileye due to its strategic vision that automotive is a big part of its future, and bring the Israeli car company in-house to help it catch up to rival chipmakers like Qualcomm and Nvidia. It also could aid Intel in the drone space, given Mobileye's focus on collision avoidance. For Mobileye, the acquisition price represents a huge premium to its $10.6 billion market close.
Of note: Intel is expected to use much of its billions in "stuck" offshore cash to finance the acquisition.

The surge in MBLY stock may prove catastrophic for noted short seller Citron Research which on February 24 started shorting the company, saying that it was "a one-trick pony" that was overvalued....MORE
From Feb. 2's "How the Hell Did Bloomberg Do An Article On Andrew Left's Latest Short Target And Not Mention His NVIDIA and Tesla Short Fails?":
...Regarding Mr. Left and Citron, he was probably seeing the same thing we, and Investor's Business Daily and just about anyone else paying attention were seeing.

And calling for a short he's playing a dangerous little game. Here are a couple prior posts to get at what I'm trying to say: Dec. 19  Is Short-Seller Muddy Waters Losing Its Mojo?
...Block told Bloomberg‘s Lisa Pham:
“I’m always a fan of shorting total frauds and Hong Kong has its share so it will always be a place for us,” Block said, commenting generally about listed companies in the city. “The trading volumes generally aren’t that good and I think there are a lot of stock manipulations in Hong Kong and that’s a function of the volumes being poor.”
Unfortunately, Muddy Waters’ recent track record is not good....MORE
At least he's talking the right stuff. In a bull market the only place to risk a short is in the questionable companies whereas in a bear going after the valuation shorts can also give you an acceptable risk/reward....
If the re-referencing format is too choppy it's that last paragraph that matters.
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