An e-zine that keeps you informed on the hottest trends on Wall Street, provides you with the key information to make you filthy rich (*your results may vary)
by Joseph Hargett | December 7, 2021
Great Ones, Intel (Nasdaq: INTC) was back in the headlines today, but not because it finally solved its productions problems. No, Intel is back in the headlines because it officially announced that it’s spinning off Mobileye — the AI self-driving vehicle unit it picked up back in 2017.
And, since I’m feeling my oats today … as they say … I decided to go with an old Irish drinking song to tell the tale of Mobileye’s coming IPO:
What do you do when you need $20 billion?
What do you do when you need $20 billion?
What do you do when you need $20 billion?
To fund your company’s growth plans!
Way hay sell Mobileye.
Way hay sell Mobileye.
Way hay sell Mobileye.
Early in the morning!
Umm … hey, Great Stuff team? Y’all need to put Mr. Great Stuff in a longboat till he’s sober.
Hey, I resemble that remark!
Anywho, how about some actual news?
Intel announced plans this morning to spin off Mobileye via an IPO as the “best opportunity to build on Mobileye’s track record for innovation and unlock value for shareholders.”
Also, according to CEO Pat Gelsinger — does gel really need singing? — “Mobileye has achieved record revenue year-over-year with 2021 gains expected to be more than 40% higher than 2020, highlighting the powerful benefits to both companies of our ongoing partnership.”
So, let me get this straight… The best way to build on Mobileye’s success, which is supposed to grow 40% this year at Intel, is to remove the company from Intel? I don’t think that spells “Intel success” as much as Gelsinger believes that spells “Intel success.”
It sounds like Intel is admitting that Mobileye will have better luck on its own rather than with Intel … something I think we’d all agree on, given Intel’s ineptitude in the past decade.
Poor choice of reasoning aside, we all know why Intel is really spinning off Mobileye: $$$.
To fix its semiconductor manufacturing issues, Intel promised to spend $20 billion on two new chip factories in Arizona. No word on whether those factories will be on oceanfront property.
When it announced this $20 billion plan, Intel was probably looking around the house wondering: “Where are we gonna get $20 billion?” And then Intel saw Mobileye, which it paid $15.3 billion for back in 2017, and said: “Good enough.”
Luckily, Mobileye has grown under the Intel umbrella, ella, ella. The company has averaged 24% revenue growth per year since 2017, raking in about $967 million in revenue in 2020. As a result, early analyst estimates predict that Mobileye could have a market value of $50 billion.
For the Intel investors reading, $50 billion is about $30 billion more than the $20 billion the company needs to build its Arizona chip factories.
But the real kicker here is that, in true Wall Street fashion, Intel is selling Mobileye … but not really. The IPO will allow Intel to remain a majority stakeholder in the freshly freed Mobileye.
In other words, Intel will still benefit from Mobileye’s success and growth, which is a good thing ‘cause Intel doesn’t have all that much to crow about lately.
In the end, the cash infusion from a Mobileye IPO greatly benefits Intel. However, I’ll need to see some real progress from Intel before I jump back into INTC stock.
On the other hand, getting out from under Intel’s umbrella, ella, ella … should help Mobileye to grow even more. Right now, Mobileye has partnerships with six different automakers, including BMW, Nissan and Volkswagen. Look for Mobileye’s garage to expand greatly once it’s not directly under Intel’s thumb.
Suffice it to say, Great Ones, I’m looking forward to the Mobileye IPO. This might be the first IPO in a while that I recommend on IPO day, especially if its valuation comes in on the low side of that $50 billion mark.
Keep your eyes peeled early in the morning! Until then, a better buying opportunity might be in the self-driving tech itself.
Take lidar, for instance — I mean, Mobileye already does lidar, but you can’t buy Mobileye stock … yet. And if you’re looking to Tesla for lidar leadership, think again. That’s a no-go for Tesla, bro.
Candygram for MongoDB (Nasdaq: MDB)! Candygram for MongoDB!
It’s an extra sweet earnings report … though I can’t promise any candy. (Where’s my satchel of M&Ms when you need it?)
The don of cloud databases, MongoDB soared as high as 16% today after it beat analyst expectations across the board.
Revenue shot up 50% year over year to reach $226.9 million and best expectations for $205.2 million. In particular, MongoDB’s Atlas cloud division saw revenue skyrocket 84% year over year as more companies use cloud database software to shift to remote/hybrid work.
While MongoDB’s loss of $0.11 per share eclipsed analysts’ estimates for a $0.38 per-share loss, the company’s losses are widening with each passing year. As of last quarter, MongoDB was dumping half of its revenue right back into marketing and sales expenses.
That sounds like a grave concern — and with the company’s mounting losses, it’s not exactly comforting — but marketing prowess is the only way MongoDB will continue to fight against the cloud-database industry’s who’s-who.
MongoDB is still stacked up against huge competition from Big Tech’s own cloud database offerings. Big fish like Amazon, Microsoft, IBM and Oracle have much more weight (and cash) to throw around compared to a tiny lil’ minnow like MongoDB.
With that, MongoDB’s continued growth will live or die by how its marketing captures high-value enterprise clients, such as the crypto-trading platform Coinbase (Nasdaq: COIN).
Oh, and keeping those customers on the recurring-revenue hook, too. MongoDB’s huge Atlas cloud customers often renew their contracts early, which bodes well for the strength of the company’s products … and future earnings growth.
Online dating service Bumble (Nasdaq: BMBL) caught the wandering eye of JPMorgan Analyst Cory Carpenter, who said BMBL stock is misunderstood by Wall Street and doesn’t deserve the 28% decline it’s experienced this past month following a reported slowdown in app payers.
That sounds an awful lot like someone saying to his buddy: “You’ll like her once you get to know her,” but let’s hear Carpenter out on this one before swiping left.
The way Carpenter sees it, Bumble isn’t getting enough credit for its user-growth trends and retention momentum. The company’s monthly active user count is up 21% over the past year, partially spurred by Bumble’s effort to build out its “BFF offering” — a segment of the app that focuses on friend- and community-building instead of the lonely hearts club.
“We have historically been skeptical on BFF, but we are warming up to it and we like the vision of the revamped product [built] around communities and shared interests,” said the analyst.
And those app payment issues? Nothing but a short-term setback due to payment changes within the Google Play app store … at least, that’s Carpenter’s story after sitting down to talk with Bumble’s management team … and he’s sticking to it.
Now, I’m not in bed with Bumble like Carpenter seems to be. But even I can see the upside potential of a well-known app that helps people find their new BFFs — not to mention Friday night dates — coming off a two-year pandemic when everyone turned into Miss Havisham.
Wall Street sided with Carpenter’s upbeat outlook, sending Bumble’s stock up nearly 9% on the day. I guess all is fair in love, war and dating app investments.
“It can be as easy as 3, 2, 1 … profit.”
If you missed the chance to get in on Clint Lee’s new Profit Countdown Strategy in October, I have good news! Clint and co. are reopening the doors for a limited time. (Go here for full details.)
In the few short weeks since Clint’s Profit Countdown event aired, they’ve closed out three winning trades in a row. Overall, their closed trades are averaging a 60% profit, with an average hold of 24 days … and Clint’s just warming up!
If Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW) pandemic-propelled stock rallies didn’t convince you this whole “do it yourself” trend has wings, then maybe a quick look at AutoZone’s (NYSE: AZO) stock will finally seal the deal.
The company just reported impressive fiscal first-quarter earnings that came in well above Wall Street’s expectations. Earnings hit $25.69 per share on revenue of $3.67 billion, beating analysts’ target of $21.01 earnings per share on revenue of $3.37 billion.
Furthermore, comparable store sales jumped 13.6% this last quarter, besting expectations for a 5% increase. Why the strong outperformance?
Well, AutoZone has all the parts, fluids — eew — and accessories people need to save cash and maintain their vehicles at home, so long as they’ve got a never-ending supply of patience and basic access to YouTube.
Wanna replace the blinker fluid that ran out last month? Get in the zone and do it yourself! Just … you know … be realistic about it and know that your mileage may vary.
Speaking of mileage, AZO stock climbed 7% higher following today’s earnings announcement. With inflationary fears and Omicron oppression continuing to rock the stock market, expect money and convenience to drive AZO stock higher in the future.
Now over to the Elon Musk soapbox, where we try and dissect whatever is stuck in the Tesla (Nasdaq: TSLA) CEO’s craw this week.
No, no, we’re not verging anywhere near the declining birth rate/underpopulation conversation Elon brought up … we’ll save humanity’s looming collapse for you to sound off on in this week’s Reader Feedback.
Y’all know I can’t pass up any and every opportunity to hype up hydrogen fuel cells (HFCs) and fuel cell electric vehicles (FCEVs). So, thanks for the lead-in again, Elon:
It’s just very difficult … to make hydrogen and store it and use it in a car. The best-case hydrogen fuel cell doesn’t win against the current case batteries, so then, obviously … it doesn’t make sense. That will become apparent in the next few years.
There’s … no reason for us to have this debate, I’ve said … my piece on this, it will be super obvious as time goes by, I don’t know what more to say.
No reason to debate? Au contraire! There’s plenty of reason for us to break down the battery-versus-HFC argument, given by just how many other transportation industry insiders also chimed in with their thoughts on hydrogen.
Musk’s hydrogen hoopla has every auto-making head honcho spouting out quoteworthy fodder today, thankfully with a tad more depth than the Musk man’s tweets. A spokesperson for Toyota says:
Therein lies the crux of this “debate” that’s not a debate — a false dichotomy between a world running on batteries and one with FCEVs. My question is … why not both? Is having too many alternatives a bad thing now?
Sell Teslas and Tesla clones to the folks who want a battery-based car. Heavy industrial uses will use FCEVs, where they’ll benefit more from hydrogen power’s longer range, faster refueling and ability to scale without the weight restrictions of batteries.
And don’t tell me thousands of jets will fill the skies powered by a hefty mountain of onboard batteries … that’s a job for HFCs.
While I’m hellbent for hydrogen (and leather), there’s no one-size-fits-all solution for decarbonization right this very moment — that’s why this is an energy transition, after all. We need multiple options to fully kick carbon-based fuels to the curb, so let’s not be too quick to dismiss one alternative fuel entirely, Mr. Musk.
I personally have my hopes set on orange juice power, but we’ll vitamin C about that…
Now, over in the world of construction equipment and heavy-duty vehicles … there’s no debate. Battery power, hydrogen fuel cells — if it’s efficient and practical for the job while reducing emissions, you’re golden.
Daum went on to explain that in situations where you can return to a depot and charge overnight, battery power can work. For long-distance trucking and transport where you need to refuel quickly and conveniently, hydrogen gets Daum’s vote.
The bottom line: As much as Musk drags his feet against the hydrogen-powered tide … as much as Musk thinks you must choose between battery power or HFCs … this simply isn’t the case. More auto industry insiders are vouching for FCEVs and incorporating hydrogen power into their fleet designs.
Great Ones, the rise of hydrogen is nigh. I’ve said my piece on this, and it will be super obvious as time goes by … as Elon says.
Let me know your thoughts on hydrogen power, Intel’s roaming Mobileye and getting in the AutoZone — GreatStuffToday@BanyanHill.com. We’d love to hear from you! In the meantime, here’s where else you can find us:
Until next time, stay Great!
Editor, Great Stuff