May 15th, 2017
After all that has been written about Intel’s acquisition of Mobileye (NYSE: MBLY), the biggest-ever Israeli exit, and all the prizes have been awarded to those involved, here are some retrospective insights about it.
Intel: The analysts are unenthusiastic
The universal cheers in Israel about the huge acquisition, while justified in themselves, have somewhat overshadowed the doubts and criticism voices by Intel shareholders and the analysts covering the company.
To summarize the main things that the critics have written about the deal (some of them even downgraded their recommendation for the Intel share), such an important acquisition by Intel in the autonomous vehicle sector reflects concern by Intel’s management about a possible decline in the company’s core business. Up until now, the company has focused on traditional computing, if this term can be used to describe the existing computer platforms: mobile computers, mobile, and what connects them to each other. All of a sudden, this looks a little old-fashioned and outdated in comparison with the imagination arousing autonomous vehicles.
Analysts also expressed disappointment that Intel is using its huge stack of cash for this acquisition, in addition to the $4 billion it spent on other acquisitions over the past two years. Some Intel shareholders would have preferred to see the company use the money to buy back some of its shares, particularly in view of the fact that Intel’s history has proved many times that it has trouble digesting acquisitions.
It is important to note that despite the financial analysts’ unemotional analyses, the acquisition itself has been prominently and positively covered by the global media, which praised Intel for such a significant strategic step bringing the company towards leadership of the developing auto-tech market.