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The massive share buyback announced by Intel Corp, ($ 25
billion) is one of the biggest ever announced by a technology company.
Apparently only Microsoft has gone further ($ 30 billion) that was announced
last year.
Many people have tried, some failed to explain that the
semiconductor industry is now maturing and such things as dividends and share
buybacks will become a common feature of the industry. Yet, only this week we
have see Samsung flex its muscles and plan to spend billions of dollars to
become an even bigger electronics giant than it already is. I didn't see
Samsung do anything other than announce it was about to do something risky!
Not that Intel and Samsung compete that much now, but I find
it quite strange that Intel should go down the road of using its cash in such a
way. Technology companies do what it says on the box, take high risks with the
potential for high rewards or crash and burn when they get it wrong.
In contrast, a 100-year-old paint producer, pay's out
dividends and such like because fundamentally nothing changes and nothing will.
Intel should not be seen as a safe house for investors, it's
a tech stock after all!
As far as the Intel share buyback is concerned all it says
to me is that the company has no idea what to do with all its cash now and in
the future, so its gone for the easy option of increased dividends and buying
back its own shares.
What's even worse is that it tells me that Intel executives
see no reason to spend $100 million on designing a new chip, spend $ 3.0
billion on a fab to make it and $ 500 million on persuading people to buy it!
Intel is letting the likes of Samsung take over in more ways
than many people may realise. I never thought the day would come—but it has—to
say that Intel is boring and as boring as watching paint dry!
Carry-on Samsung,SanDisk and anyone else who still thinks
technology is about taking risks, Intel has now left the building, hopefully
not too many will follow them!
http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B4146436E%2D79FE%2D4281%2D9007%2DCA16871C42EF%7D
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| Senior Technical Program Manager (Dublin, Ireland, 02/04/2008) | | Senior Embedded Design Support Engineer (Shannon, Co Clare, Ireland, 19/03/2008) | | Embedded Support Engineer (Intel Shannon, Co Clare, Ireland, 19/03/2008) | | Senior Component Design Engineer (Intel Shannon, Co Clare, Ireland, 19/03/2008) | | European Account Manager (Home Based, 05/02/2008) |
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