INTC 22.50 cpps

Qualcomm approached Intel about a takeover in recent days, WSJ reports
https://finance.yahoo.com/news/qualcomm-approached-intel-takeover-recent-192945200.html

Reuters
Fri, Sep 20, 2024, 1:29 PM MDT1 min read

(Reuters) -Qualcomm made a takeover approach to chipmaker Intel in recent days, the Wall Street Journal reported on Friday, citing people familiar with the matter.

Intel's shares reversed course to rise 8%, while Qualcomm fell 4% in afternoon trade.

Intel has been attempting to turn its business around by focusing on its chip foundry unit and artificial intelligence processors, but its shares have plummeted in recent months as it cut jobs, suspended its dividend and faced a high-profile board member resignation.

Qualcomm and Intel did not immediately respond to Reuters requests for comment.

Super Micro: Fresh Evidence Of Accounting Manipulation, Sibling Self-Dealing And Sanctions Evasion At This AI High Flyer
Published on August 27, 2024 https://hindenburgresearch.com/smci/

Super Micro Computer Inc. is a $35 billion server maker based in Silicon Valley, California that has ridden the wave of AI enthusiasm.

Our 3-month investigation, which included interviews with former senior employees and industry experts as well as a review of litigation records, international corporate and customs records, found glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.

In 2018, Super Micro was temporarily delisted from Nasdaq for failing to file financial statements. By August 2020, the company was charged by the SEC for “widespread accounting violations,” mainly related to $200+ million in improperly recognized revenue and understated expenses, resulting in artificially elevated sales, earnings and profit margins.

Less than 3 months after paying a $17.5 million SEC settlement, Super Micro began re-hiring top executives that were directly involved in the accounting scandal, per litigation records and interviews with former employees.

A former salesperson told us: “Almost all of them are back. Almost all of the people that were let go that were the cause of this malfeasance.”

According to a lawsuit filed in April 2024, Super Micro waited only 3 months after the SEC settlement before restarting “improper revenue recognition,” “recognizing incomplete sales,” and “circumvention of internal accounting controls”.

Even after the SEC settlement, pressure to meet quotas pushed salespeople to stuff the channel with distributors using “partial shipments” or by shipping defective products around quarter-end, per our interviews with former employees and customers.

One former salesperson described pushing products to distributors based on made-up demand forecasts, completing a partial shipment, then later coming up with an excuse for why the rest didn’t happen. “And now you have a problem. Accounting problem maybe.”

Former employees told us Super Micro’s business culture has not improved. Former senior sales director: “I don’t think the behavior of the company in many ways has changed in the 5 years since I started, and I started shortly after that delisting problem.”

Three senior employees who left in early 2018 amidst the accounting scandal were rehired, individually serving as (1) a member of the board of directors (2) a consultant serving close to the CEO (3) and a VP of business development.

Former CFO Howard Hideshima left the company in January 2018 and was later individually charged by the SEC with accounting violations. In May 2023, he was hired by a key related party owned by Super Micro CEO’s brother.

A new CFO, praised by co-workers for his integrity, was hired in January 2018 to help the company recover from the scandal. He helped Super Micro re-list but resigned in January 2021. A former sales director suggested that he was edged out by the company.

Beyond fresh questions around its revenue accounting, we found that Super Micro’s relationships with both disclosed and undisclosed related parties serve as fertile ground for dubious accounting.

For example, disclosed related party suppliers Ablecom and Compuware, controlled by Super Micro CEO Charles Liang’s brothers, have been paid $983 million in the last 3 years. Ablecom is also partly owned by Super Micro CEO Charles Liang and his wife.

The relationships seem oddly circular. Super Micro provides components to the entities which assemble them and sell them back to Super Micro. They also rent warehousing and factory space to Super Micro even though it has its own sprawling factory.

The related parties seem to do little other business: ~99.8% of Ablecom’s exports to the U.S. since 2020 were to Super Micro, and ~99.7% of Compuware’s U.S. exports were to Super Micro, per trade records.

In addition to the concerns around the disclosed related parties, we found evidence of undisclosed related parties. The youngest brother of Super Micro’s CEO owns two Taiwan-based entities that make server components. Media reports and former employees indicate the entities are Super Micro suppliers.

Both entities operate out of the Super Micro Science and Technology Park in Taiwan, but Super Micro has not disclosed related party transactions with them.
Another brother of Super Micro’s CEO operates a disclosed related party but is also the director and shareholder of undisclosed Hong Kong and Taiwanese entities, which appear to resell Super Micro products and provide “professional OEM services.” It operates out of the same building as related party Compuware.
Collectively, disclosed and undisclosed related parties pose accounting risks relating to revenue recognition and reported margins. A former executive told us: “Basically it’s a governance issue and just kind of shows you that Charles doesn’t give a shit what you think…you’re right to worry, though, that you just never know what’s lurking.”

In addition to the CEO’s brothers, the company has an odd relationship with a key customer. In February 2024, Super Micro made an undisclosed investment in tech startup Lambda Labs as part of its $320 million funding round, per Bloomberg and per a confirmation we received from Lambda’s COO.
In August 2024, Super Micro signed an “unusual” $600 million contract to lease space at a California data center and sub-lease it to Lambda. The CFO glossed over questions about the reason for this arrangement.

In October 2023, two related parties run by CEO Liang’s brothers, one of them partially owned by Super Micro’s CEO, reportedly invested in small Taiwanese tech company Leadtek. Leadtek’s website advertises products almost identical to Super Micro’s, yet Super Micro discloses no relationship with Leadtek in what appears to be a clear undisclosed related party.

Super Micro has claimed its liquid cooling technology will “revolutionize the industry” and is its “competitive edge.” But at a recent industry conference, Super Micro featured related party Ablecom’s liquid cooling solutions, per an Ablecom engineer.

Ablecom has several patents for its liquid cooling technology. Despite this, Super Micro has never disclosed any related party involvement in its liquid cooling technology.

Besides questions around related parties and proprietary product offerings, in 2006, Super Micro pleaded guilty to a felony count of exporting banned components to Iran. The CEO said the company was in its infancy and had learned from its mistakes.

When Russia invaded Ukraine in February 2022, the U.S. government imposed stringent restrictions and bans on exports to Russia of high-performance computers and components.

Super Micro disclosed that some of its products were subject to export bans and said it was halting all sales and had “not recorded revenue” from Russia since the day before the war started.

Exports of Super Micro’s high-tech components to Russia have spiked ~3x since the invasion of Ukraine, apparently violating U.S. export bans, according to our review of more than 45,000 import/export transactions.

At least 46 companies that handled Super Micro products to Russia since the invasion are now under OFAC sanctions or on U.S. government watchlists.
Almost two-thirds of Super Micro’s exports to Russia since the invasion correspond to “high priority” components that the Russian military may be diverting to the battlefield, per U.S. government warnings.

One of the biggest importers of Super Micro products in Russia is a supplier to one of Russia’s largest “supercomputers” at a once-secret, now-sanctioned research center. That importer, Niagara Computers, has received at least $46.3 million worth of Super Micro products since the start of the Russia-Ukraine war, per trade data.

The sales were initially made through a distributor in California, but were later made through 3 newly-formed Turkish shell companies, including one that was eventually sanctioned for smuggling restricted items to Russia.

Almost $30 million worth of Super Micro components have also been shipped to Russia’s largest importer of dual-use civilian-military chips via a newly created Hong Kong shell entity. That Russian importer is now under OFAC sanctions.

Since 2016, Super Micro has had a joint venture with a Chinese state-run company called Fiberhome, which is involved in a campaign of “human rights violations and abuses,” high-tech surveillance, and repression of ethnic communities in western China, per the U.S. government.

Super Micro has sold ~$196 million of sophisticated computer components to the joint venture since Fiberhome was watchlisted by the U.S. government in 2020. Super Micro justifies the sales by saying the JV entity itself wasn’t watchlisted, even though its partner was.

Besides accounting issues and sanctions evasion, competition and quality concerns have resulted in major companies dropping Super Micro entirely or reducing their share.

Nvidia is a key partner and chip supplier to Super Micro. In May 2024, CEO Jensen Huang publicly endorsed Super Micro’s competition: “Nobody is better at building end-to-end systems of very large scale for the enterprise than Dell.”

CoreWeave was Super Micro’s largest customer over the last year, per Bloomberg Intelligence. But in December 2023, Dell announced a deal with CoreWeave for “thousands” of GPU servers, potentially worth over $1 billion.

Tesla had been sourcing its servers exclusively from Super Micro, per Barclays Research in September 2023. But recent reports in May 2024 and posts by Elon Musk show Dell has now won major deals from Tesla, and Musk’s xAI, eroding Super Micro’s exclusivity.

Super Micro has conceded that it is “under-indexed” with the world’s largest technology companies, called “hyperscalers.” Amazon AWS was a customer but cut ties after delivery issues, per a former employee.

Digital Ocean, a U.S. cloud service provider, switched from Super Micro to Dell after service issues, according to a Digital Ocean employee, describing the relationship as “a train wreck of sorts” fraught with reliability issues.

Genesis Cloud is touted as a “success story” on Super Micro’s website. But current and former employees told us otherwise: “Catastrophic. It is, on the technical side, one of my worst experiences I’ve had…in the industry.”

GMI Cloud, a start-up GPU cloud provider in Asia and the U.S., told us they experienced a malfunction rate of 17.5% on its orders of 256 Super Micro servers. GMI is now moving away from Super Micro to HPE less than a year after its first order, per an employee.

NexGen Cloud, an Nvidia partner, disclosed in October 2023 that it was investing $1 billion to build an AI super-cloud in Europe with over 20,000 Nvidia GPUs. But a NexGen employee told us that sometimes up to half of the orders received from Super Micro had firmware issues.
Multiple former employees and channel partners confirmed that after-sales service is undermining Super Micro’s ability to retain customers. One former salesperson said: “It’s their Achilles heel. It’s just horrible.”

All told, we believe Super Micro is a serial recidivist. It benefitted as an early mover but still faces significant accounting, governance and compliance issues and offers an inferior product and service now being eroded away by more credible competition.

Initial Disclosure: After extensive research, we have taken a short position in shares of Super Micro Computer, Inc. (Nasdaq:SMCI). This report represents our opinion, and we encourage every reader to do their own due diligence. Please see our full disclaimer at the bottom of the report.
______________________________________________

SMCI vs DELL Aug 27 to current day:

SMCI
1229.00 H on 3/8/24
50% drop = 614.50
382.80 L on 9/6/24 (-68.85 % off of High)

How Concerned Should Super Micro Computer Investors Be About Hindenburg's Short Report?
By David Jagielski – Sep 5, 2024 at 6:55AM

https://www.fool.com/investing/2024/09/05/how-concerned-should-super-micro-computer-investor/?utm_source=yahoo-host-full&utm_medium=feed&utm_campaign=article&referring_guid=e6fde9e9-b45b-4b43-aa0e-570bf4e50db2

Key Points
Hindenburg Research alleges that Super Micro Computer is currently involved in accounting manipulation.
The Securities and Exchange Commission previously fined the company $17.5 million.

Current Price
$437.20
Price as of September 19, 2024, 4:00 p.m. ET
Is the tech stock headed lower, or could this sell-off create a great buying opportunity for investors?

Super Micro Computer (SMCI 0.07%), also known as Supermicro, is in a tailspin. Hindenburg Research recently released a short-seller report about the tech company, alleging that it is once again involved in manipulating its numbers. That has put investors into panic mode. Supermicro's shares have been down more than 30% in the past month.

Investors were already starting to grow concerned about artificial intelligence (AI) stocks such as Supermicro becoming too expensive, and now there are worries about the overall business itself, including its internal controls and how legitimate its numbers are. Does this short-seller report raise flags about Supermicro that should keep you away from the stock, or could its reduced price simply make now a good time to take a contrarian position in the company?

Hindenburg alleges accounting manipulation
According to the Hindenburg report, after interviewing ex-employees and industry experts and reviewing documents, the research firm believes there are "glaring accounting red flags" suggesting that revenue may be overstated and internal controls may not have been followed. Hindenburg says the people involved in an accounting issue that took place years ago are still involved with the business today.

In 2020, the Securities and Exchange Commission (SEC) charged Supermicro and then CFO Howard Hideshima with understating expenses and recognizing revenue too aggressively from its 2015 to 2017 fiscal years. The fine was $17.5 million. And in 2018, the stock was also temporarily delisted for not filing its financial statements on time.

What should investors make of the report?
Short-seller reports are often biased and can contain incomplete and one-sided information. A few things about this one stand out to me.

For starters, the ex-employees interviewed for the report seem to primarily be sales reps and directors, who would presumably be unfamiliar with accounting policies and controls. And in any business, there will always be pressure to push as much through as possible at the quarter's end to help meet targets, which the report alleges.

Supermicro's current CFO, David Weigand, took on the role in 2021 and has been with the company only since 2018, having previously worked at Hewlett Packard Enterprise. CFO is the company's most important accounting role, and Supermicro changed that position because it got into trouble with the SEC.

The Hindenburg report tries to suggest that Weigand has looser oversight and internal controls than predecessor Kevin Bauer, who left the company after helping it relist and resolve its financial problems. But that's speculative at best. With a different CFO at the helm, there's no reason to suggest that the company is applying the same accounting practices and policies that previously raised concerns.

As with any short-seller report, investors shouldn't give it too much importance or allow it to influence their decision-making without substantiated evidence.

Supermicro's business has been booming, and demand for its AI servers and infrastructure is skyrocketing. The company is coming off a strong fiscal year for the period ending June 30, in which net sales of $14.9 billion more than doubled the previous year's tally of $7.1 billion. Net income of $1.2 billion also jumped significantly from $640 million a year ago. With such solid numbers and demand for its products, Supermicro doesn't strike me as a business that needs a whole lot of help at the quarter's end or year's end to boost its numbers.

Should you buy Supermicro stock?
A short-seller report can be scary, but investors must take it with a grain of salt. The information could come from disgruntled ex-employees or those unfamiliar with the matters at hand. There's nothing from Hindenburg's short-seller report that makes me think Supermicro's business is in serious trouble, as it seems to refer heavily to trouble the company got into before its new CFO took over.

This could be a good time for investors to take advantage of the potentially irrational fear surrounding Supermicro stock. At a price that's 13 times its estimated future profits (based on analyst estimates), the tech stock could prove to be a steal of a deal.

Meet the New Stock-Split Stock That Outperformed Nvidia in the First Half and Wall Street Thinks Could Almost Double
Adria Cimino, The Motley Fool

Fri, Sep 20, 2024, 2:40 AM MDT4 min read

https://finance.yahoo.com/m/0d4aa451-e720-3879-ab8e-94db6a7c9593/meet-the-new-stock-split.html

Nvidia has been a tough act to follow in recent years. The artificial intelligence (AI) chip giant has delivered triple-digit increases in earnings quarter after quarter, and the share price has followed. Nvidia stock has soared more than 2,400% over the past five years, and considering the company's focus on innovation, this stellar performance may continue.

Though Nvidia has garnered the greatest share of investor attention in recent times, another tech player actually outperformed this AI powerhouse in the first half of the year. And this company followed in Nvidia's footsteps recently by announcing a stock split, a move to bring a high-flying share price down to earth -- and make the stock more accessible for a broader range of investors.

Now, Wall Street predicts this player's gains may be far from over. Let's meet the new stock-split stock that analysts think could nearly double within the coming 12 months...

And this stock is Super Micro Computer (NASDAQ: SMCI), a company that saw its stock price soar 188% in the first half, surpassing Nvidia's 149% increase. Though individual forecasts vary, the average Wall Street estimate calls for the stock to climb 90% from today's level.

It's important to note that this once high-flying stock has been wading through difficult waters in recent weeks. A short report released by Hindenburg Research, alleging troubles at the company, has weighed on the shares. In an unrelated move, Supermicro delayed the filing of its 10-K annual report, and this has represented an additional headwind.

I see these as short-term pressures, but they don't change Supermicro's long-term story. And considering the 20% decline in the stock since the short report, it looks dirt cheap right now -- it trades for only 13 times forward earnings estimates, down from more than 45 times earlier in the year.

In recent days, some analysts have highlighted the potential of Supermicro. For example, Needham rated Supermicro a buy in new coverage of the stock -- and Needham expects a gain of 37% in the months to come.

Why should we be so optimistic about Supermicro? First, the company has proven its ability to dominate in the area of full rack scale solutions for data centers. Supermicro's servers and other products share many common parts so the company can more quickly build a particular item to suit a customer's needs. The equipment maker also works very closely with all of the top chipmakers -- including Nvidia -- so that it can immediately include their innovations in its products. This has helped revenue in one single quarter surpass annual revenue as recently as 2021.

Supermicro's big opportunity
Second, Supermicro now faces a major opportunity that could launch a whole new wave of lasting growth for the company. One of the biggest problems facing the data centers of today and tomorrow is the fact that AI workloads produce excessive heat. Supermicro's direct liquid cooling (DLC) technology, once a slow-growth business, now promises to offer explosive growth.

The company predicts that within the coming 12 months, 25% to 30% of data centers will be equipped with DLC, and Supermicro will dominate this market. At the same time, Supermicro is preparing for demand for DLC and its equipment in general as it brings online its Malaysia facility -- one that will focus on volume and speed.

Considering forecasts of an AI market to reach $1 trillion by the end of the decade, and the key role of data centers in all of this, Supermicro's revenue could continue to climb for quite some time.

As for the stock split, Supermicro will trade at its new split-adjusted price as of Oct. 1. This won't change anything fundamental about the company or stock -- valuation and market value remain the same. So, it won't act as a catalyst for share performance, but it is a positive move as it will make it easier for more investors to buy the stock over time.

All of this represents a lot of positive points for Supermicro, setting the stage for major growth potential -- and making it a fantastic stock to buy on the dip.

Is Rivian Automotive, Inc. (RIVN) The Best EV Charging Stock To Invest In?
Affan Mir
Sat, Sep 14, 2024, 8:12 AM MDT7 min read
https://finance.yahoo.com/news/rivian-automotive-inc-rivn-best-141236293.html

We recently published a list of 11 Best EV Charging Stocks To Invest In. In this article, we are going to take a look at where Rivian Automotive, Inc. (NASDAQ:RIVN) stands against other best EV charging stocks.

Over the last few years, the electric vehicle (EV) market has experienced significant growth, due to consumer demand, automaker investments, and substantial government support. In the US, the $7.5 billion from the 2021 Infrastructure Investment and Jobs Act and tax credits from the Inflation Reduction Act have also fueled EV growth.

According to the International Energy Agency (IEA), global public charging points are expected to exceed 15 million by 2030 and will increase to nearly 25 million by 2035. In the U.S., the government aims to install 500,000 public charging ports by 2030, with the total number of chargers expected to reach 900,000 in 2030 and 1.7 million by 2035.

Globally, home charging is expected to grow to over 270 million units by 2035, with more than 45% of electricity coming from public or private non-home chargers. Charging infrastructure for heavy-duty vehicles (HDVs) is also expected to grow significantly. By 2035, installed HDV charging capacity is projected to reach 2,000 GW. Policies like the EU’s Alternative Fuels Infrastructure Regulation and U.S. strategies are driving this expansion, alongside private investments.

The Road Ahead for EV Charging: Industry Growth and Challenges
According to PwC’s analysis, the number of charge points in the U.S. must grow from around 4 million today to 35 million by 2030 to meet demand. The PwC report has projected that the number of EVs could reach 27 million by 2030 and 92 million by 2040.

The EV supply equipment (EVSE) market is expected to expand from $7 billion to $100 billion by 2040, at a 15% compound annual growth rate. The market’s primary value pools are hardware, software, installation services, and charge point operators (CPOs). CPOs, which build, operate, and maintain charging stations, are expected to dominate and capture 65% of market revenue by 2040. On the other hand, hardware providers’ share will shrink from 46% today to 20% by 2040.

Despite the clear market opportunities, challenges remain, including educating consumers, financing infrastructure, and ensuring cost-effective solutions across different charging segments. Companies looking to enter or expand in the EVSE market will need to understand evolving customer needs, adopt appropriate business models, and prepare for long-term investments with a focus on strategic partnerships and potential acquisitions.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points


Rivian Automotive (NASDAQ:RIVN)
Number of Hedge Fund Holders: 37

One of the best EV charging stocks, Rivian Automotive (NASDAQ:RIVN) is a well-known name in the EV industry. It is making considerable advancements with its charging infrastructure to support the increasing number of EVs on the road.

At the core of the company’s strategy is the Rivian Adventure Network (RAN), which is a dedicated network of DC fast chargers exclusively for Rivian owners. As of February, the network featured 400 fast chargers distributed across 67 locations in the U.S. The company plans to expand this network significantly, aiming to install 3,500 chargers across about 600 sites in the U.S. and Canada by the end of 2025.

The company’s commitment to improving its charging infrastructure is further evident from its recent decision to open the RAN to other electric vehicle brands by the end of 2024. It will allow vehicles equipped with CCS (Combined Charging System) ports to use the company’s chargers, which will broaden the network’s accessibility and benefit the entire EV community.

Additionally, it has introduced a new charger design that accommodates both 400-volt and 800-volt battery systems, which ensures compatibility with a wide range of EVs.

Alongside the RAN, Rivian (NASDAQ:RIVN) offers Level 2 charging solutions through its Rivian Waypoints. The public chargers are situated near popular spots like shopping centers, restaurants, hotels, and parks, which allows EV owners to recharge their vehicles conveniently while they are out. The company intends to deploy over 10,000 Waypoint chargers throughout the U.S. and Canada to increase the ease of charging for all EV drivers.

For home use, the company provides the Wall Charger, which delivers 11.5 kW of power for efficient overnight charging. The home charger is compatible with most EVs and comes with Wi-Fi connectivity for over-the-air updates. Additionally, the company includes a portable charger with each vehicle, which lets users charge their cars using both 240V and 120V outlets.

Rivian’s (NASDAQ:RIVN) charging infrastructure is powered entirely by renewable energy, which aligns with the company’s dedication to environmental sustainability. The RAN has achieved an uptime of over 98% in 2024, reflecting the reliability and strength of the company’s charging network.

It plans to adopt the North American Charging Standard (NACS) beginning in 2025. The transition will allow Rivian vehicles to use Tesla’s expansive Supercharger network through a NACS DC adapter. During the transition, Rivian’s chargers will also support NACS adapters, which facilitates continued compatibility and ease of use for Rivian owners.

Supported by various national and state initiatives, such as the U.S. National Electric Vehicle Infrastructure (NEVI) program, the company is well-positioned to leverage these incentives to expand its charging network and drive the adoption of electric vehicles. Its Q2 performance reflects its growth potential, with deliveries increasing by 9% year over year to 13,790 units and generating around $1.2 billion in revenue.

In Q2, 37 hedge funds held stakes in Rivian (NASDAQ:RIVN), with positions worth $383.602 million. As of the second quarter, SoMa Equity Partners is the most significant shareholder in the company. The firm has increased its stake in the company by 53% to 6.6 million shares worth $88.5 million.

Meridian Hedged Equity Fund stated the following regarding Rivian Automotive, Inc. (NASDAQ:RIVN) in its first quarter 2024 investor letter:

“Rivian Automotive, Inc. (NASDAQ:RIVN) is a US-based manufacturer of electric vehicles, namely the R1T pickup truck and R1S SUV. They also have exposure to the commercial vehicle market with their electric delivery vans (EDVs) that are sold to companies like Amazon. The company has faced challenges amid the broader slowdown in electric vehicle demand and rising interest rates. This has contributed to Rivian underperforming expectations over the past few quarters. Rivian has also incurred losses as it continues to invest in the development of its products and manufacturing capabilities. We own Rivian in a hedged structure, which provides a significant margin of safety. Despite the near[1]term challenges, several factors provide optimism that Rivian can emerge as a long-term winner in the EV market. Rivian’s balance sheet is strong, with a substantial cash position that enables the company to continue investing in its growth and navigate through the current economic headwinds. Rivian is also unveiling the R2, which is a smaller and more affordable EV platform that will open the company’s products to a wider customer base. Lastly, Rivian’s investment in the enhancement of its production capabilities should improve the company’s manufacturing efficiency and drive a path to profitability. We continue to hold the company in a hedged structure.”

Overall RIVN ranks 3rd on our list of the best EV charging stocks. While we acknowledge the potential of RIVN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe.

IRBT cpps 7.14

ABNB 118.30 gap

Intel moves to spin out foundry business, inks AI chip deal with AWS
Kyle Wiggers
Tue, Sep 17, 2024, 1:00 AM MDT2 min read

https://finance.yahoo.com/m/2abe52e9-5005-3f57-8ec4-c7f5dd132149/intel-moves-to-spin-out.html?

Intel has announced a key customer win and changes to its foundry business as the beleaguered chipmaker looks to execute a turnaround.

Intel is taking steps to transition its chip foundry division, Intel Foundry, to an independent subsidiary, Intel CEO Patrick Gelsinger said in a blog post. Intel Foundry’s leadership isn’t changing, and the subsidiary will remain inside Intel. But Intel Foundry will gain an operating board, including independent directors.

Gelsinger also said the company would pause its chip fabrication projects in Poland and Germany for two years "based on anticipated market demand," and consider pulling back on its chip packaging and testing operations in Malaysia. Intel previously pledged to spend over $36 billion to build semiconductor factories in Magdeburg, Germany; $4.6 billion on a chip plant near the Polish city of Wroclaw; and $7 billion on its Malaysia footprint.

But in a win for the foundry business, Gelsinger revealed that Intel has signed a deal with AWS to co-develop an AI chip using Intel's 18A chip fabrication process. Intel has also agreed to produce a custom Xeon 6 processor for AWS, building on an existing partnership between the two firms.

"We have tripled our deal pipeline since the beginning of the year," Gelsinger said of Intel Foundry's business, describing the AWS deal as a "multi-year, multi-billion-dollar framework" that could potentially involve additional chip designs. He added that it "demonstrates the continued progress we are making to build a world-class foundry business."

Intel's cost-cutting and dealmaking -- along with a newly awarded $3.5 billion contract to build chips for the Pentagon -- sent the company's stock soaring over 6% at market close. It's a bright spot in Intel's otherwise grim fiscal year.

In Q1, Intel posted a $437 million net loss -- a loss that widened to $1.6 billion in Q2. Intel Foundry posted $5.3 billion in operating losses in H1, despite a slight year-over-year climb in revenue.

Intel also reportedly lost out on a major customer, Sony, after failing to come to a chip manufacturing agreement for Sony's next PlayStation console. That tie-up would've contributed $30 billion to Intel's foundry business, according to Reuters.

This summer, Intel announced a $10 billion cost-reduction plan, which included laying off 15,000 staffers through separation and early retirement offerings. (Intel says it's more than halfway through the process and expects to wrap up by the end of the year.) The chipmaker has also reportedly considered selling its autonomous driving arm Mobileye and its enterprise networking division.

SHOP

This Stock-Split Stock Just Ran Into Trouble. Here's Why It's Still a Buy.

https://finance.yahoo.com/m/7d50ddfb-e7d6-3a62-a15f-6e3f35979d2d/this-stock-split-stock-just.html

Adria Cimino
Updated Mon, Sep 16, 2024, 2:33 AM MDT4 min read

Super Micro Computer (NASDAQ: SMCI) posted a fantastic first half of the year. Thanks to demand from artificial intelligence (AI) customers, in just one quarter, the company delivered sales that surpassed what it used to generate in a full year as recently as 2021. The S&P 500 and Nasdaq-100 even welcomed this 30-year-old tech company to join. And Supermicro's share price reflected all this good news, climbing 188% to outperform market darling Nvidia.

In fact, the stock had reached such high levels — peaking at more than $1,100 early in the year — that in August, the company announced a stock split planned for later this month. This sort of operation involves the issuance of additional shares to current holders to bring down the per-share price, opening up the investment opportunity to a broader range of investors.

But in recent weeks, the story has lost some of its sparkle. A short report by Hindenburg Research alleging troubles at Supermicro hit the stock badly — it's dropped 16% since the report's late-August release. Separately, Supermicro delayed filing its 10-K annual report, another element that's weighed on the shares. Despite these challenges, Supermicro still makes a great buy right now. Let's find out why.

Hindenburg's short position
First, let's consider the bad news. In its report, Hindenburg alleged "glaring accounting red flags," "evidence of undisclosed related party transactions," and other potential issues. But it's important to keep one thing in mind. Hindenburg holds a short position in Supermicro, meaning it will benefit if the stock declines. This bias makes it difficult to rely on Hindenburg as a source of information about the company.

Another point to keep in mind is that Supermicro addressed the report, saying it "contains false or inaccurate statements." So, I wouldn't base a decision on whether to buy or sell Supermicro on the Hindenburg report. Instead, it's better to consider what we know, such as the company's path so far, details from recent earnings reports, and market potential.

I mentioned that Supermicro has been around for quite some time, but it's only over the past few years that its earnings have truly taken off. That's because AI customers are busy building out their data centers, and they're rushing to Supermicro for its workstations, servers, and other products.

Supermicro's strategy
Why Supermicro? The company is able to quickly build products to suit a customer's needs, including the very latest technology. This is because Supermicro uses building block technology, meaning its products contain a lot of common parts. Supermicro also works closely with top chip designers to immediately integrate their new releases into its products.

This has helped the equipment maker reach record revenue in recent quarters. On top of this, Supermicro may be at the start of a new high-growth opportunity thanks to its ability to solve a big problem with today's AI data centers: the accumulation of heat. Supermicro makes direct liquid cooling (DLC) elements to handle this and sees demand here set to take off. The company predicts 25% to 30% of new data centers will use this technology in the coming 12 months and Supermicro will dominate the market.

Considering the AI market is forecast to reach more than $1 trillion by the end of the decade, it's clear that heat could become a problem — and Supermicro may see a huge wave of growth from its expertise in DLC.

Finally, Supermicro recently said that though it's delaying its 10-K filing, it doesn't expect any major changes to its fourth-quarter or fiscal-year results. That's another element that should ease our minds.

So, Supermicro offers us a solid track record, a strategy that sets it apart, and potential for growth ahead. In addition, due to the recent headwinds, the stock has fallen into dirt cheap territory at only about 13x forward earnings estimates. And that's why now is a great time for long-term investors to consider scooping up shares of this company that may be heading for a whole new wave of growth.

NVDA GAP 86.23 TRK
200 day tag TRK curr 91.09

(88.55)

Curr pps 117.42 (headed into mid sept 9/16)
200 day curr. 91.09 up from last track

Open Gaps
Direction Date range
(note: pre split gaps and now split adjusted number)
up May-03-2024 86.23 to 87.04 (that would take poor earnings, yuck news and then time)
up Feb-22-2024 68.89 to 74.22 (The widest)

CLOSED:
up Aug-13-2024 111.07 to 111.58 ✔️9/3
up Jun-05-2024 116.60 to 117.46✔️ 7/24
up May-28-2024 106.47 to 109.83 ✔️Tailed 7/25 and full candled (much better) 7/30
up May-23-2024 96.02 to 101.52 (largest gap) ✔️filling 8/5
up May-15-2024 90.99 to 91.59✔️ 90.69 low 8/5/24

Upstart Announces Proposed Private Offering of $300,000,000 of Convertible Senior Notes Due 2029
September 16, 2024 06:50 AM Eastern Daylight Time
SAN MATEO, Calif.--(BUSINESS WIRE)--Upstart Holdings, Inc. (NASDAQ: UPST) today announced its intention to offer, subject to market conditions and other factors, $300,000,000 aggregate principal amount of Convertible Senior Notes due 2029 (the “notes”) in a private offering (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Upstart also expects to grant the initial purchasers of the notes an option to purchase, within a 13-day period beginning on, and including, the date the notes are first issued, up to an additional $45,000,000 aggregate principal amount of the notes.

The notes will be senior, unsecured obligations of Upstart, and will bear interest payable semi-annually in arrears. The notes will mature on October 1, 2029, unless earlier converted, repurchased or redeemed. The notes will be convertible into cash, shares of Upstart’s common stock, or a combination thereof, at Upstart’s election. The interest rate, initial conversion rate, and other terms of the notes will be determined at the time of pricing of the offering.

Upstart intends to use a portion of the net proceeds from the offering to pay the cost of the capped call transactions described below. Upstart also intends to use a portion of the net proceeds from the offering for the repurchase of a portion of its outstanding 0.25% Convertible Senior Notes due 2026 (the “2026 Notes”). Upstart intends to use the remainder of the net proceeds from the offering for general corporate purposes.

In connection with the pricing of the notes, Upstart expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers or their respective affiliates and/or other financial institutions (the “option counterparties”). The capped call transactions will cover, subject to anti-dilution adjustments, the number of shares of common stock underlying the notes sold in the offering. The capped call transactions are expected generally to offset the potential dilution to Upstart’s common stock upon any conversion of notes and/or reduce any cash payments Upstart is required to make in excess of the principal amount of converted notes, as the case may be, with such offset and/or reduction subject to a cap. If the initial purchasers exercise their option to purchase additional notes, Upstart expects to use a portion of the net proceeds from the sale of such additional notes to enter into additional capped call transactions with the option counterparties.

Upstart has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to purchase shares of Upstart’s common stock and/or enter into various derivative transactions with respect to Upstart’s common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of Upstart’s common stock or the notes at that time. In addition, Upstart expects that the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Upstart’s common stock and/or purchasing or selling shares of Upstart’s common stock or other securities of Upstart in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so (x) during the observation period for conversions of notes on or following July 1, 2029, (y) following any conversion of notes prior to July 1, 2029, or in connection with any repurchase or redemption of the notes, to the extent Upstart unwinds a corresponding portion of the capped call transactions, and (z) if Upstart otherwise unwinds all or a portion of the capped call transactions). This activity could also cause or prevent an increase or decrease in the market price of Upstart’s common stock or the notes, which could affect the ability of noteholders to convert the notes and, to the extent the activity occurs following a conversion or during any observation period related to a conversion of the notes, it could affect the number of shares and value of the consideration that noteholders will receive upon conversion of the notes.

Upstart also expects in connection with the repurchase of a portion of its 2026 Notes, those holders of the 2026 Notes that sell their 2026 Notes to Upstart may enter into or unwind various derivatives with respect to Upstart’s common stock (including entering into or unwinding derivatives with one or more of the initial purchasers in this offering or their respective affiliates) and/or purchase shares of Upstart’s common stock concurrently with or shortly after the pricing of the notes. In particular, Upstart expects that many holders of the 2026 Notes employ a convertible arbitrage strategy with respect to the 2026 Notes and have a short position with respect to Upstart’s common stock that they would close out through purchases of Upstart’s common stock and/or the unwinding of various derivatives with respect to Upstart’s common stock, as the case may be, in connection with Upstart’s repurchase of the 2026 Notes. This activity could increase (or reduce the size of any decrease in) the market price of Upstart’s common stock, which may also affect the trading price of the notes at that time, and could result in a higher effective conversion price for the notes. The initial conversion price for the notes will be determined based on the last reported sale price of Upstart’s common stock per share on the Nasdaq Global Select Market on the day of pricing of the offering.

In connection with the issuance of its 2026 Notes, Upstart entered into capped call transactions (the “existing capped call transactions”) with certain financial institutions including certain of the initial purchasers or their affiliates (the “existing capped call counterparties”). If Upstart repurchases any of the 2026 Notes, Upstart expects to enter into privately negotiated agreements with the existing capped call counterparties concurrently with the pricing of the notes to terminate a portion of the existing capped call transactions corresponding to any principal amount of the 2026 Notes repurchased. In connection with the termination of the existing capped call transactions, Upstart expects the existing capped call counterparties or their respective affiliates to sell shares of Upstart’s common stock and/or unwind various derivatives with respect to Upstart’s common stock to unwind their hedge in connection with those transactions. Such activity could decrease, or reduce the size of any increase in, the market price of Upstart’s common stock at that time and could decrease, or reduce the size of any increase in, the market value of the notes at that time.

The notes will only be offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A promulgated under the Securities Act by means of a private offering memorandum. Neither the notes nor the shares of Upstart’s common stock potentially issuable upon conversion of the notes, if any, have been, or will be, registered under the Securities Act or the securities laws of any other jurisdiction, and unless so registered, may not be offered or sold in the United States, except pursuant to an applicable exemption from such registration requirements.

This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation, or sale in any jurisdiction in which such offer, solicitation, or sale is unlawful.

SMCI cpps 457.00

open Gap 334 1/18/24
BB 324

Customer and Partner Letter (SMCI 9/3/24)

https://www.sec.gov/Archives/edgar/data/1375365/000137536524000032/0001375365-24-000032-index.htm

Subject: Update from Supermicro CEO Charles Liang
Super Micro Computer, Inc.
980 Rock Avenue
San Jose, CA 95131 USA
September 3, 2024

Dear Valued Customers and Partners,

You may have seen our recent announcement that Supermicro will be delayed in filing its Annual Report for the fiscal year ended June 30, 2024, and separately, a report published by a short seller. I wanted you to hear from me directly about what they mean for you and our products.
Neither of these events affects our products or our ability and capacity to deliver the innovative IT solutions that you rely on every day. Our production capabilities are unaffected and continue operating at pace to meet customer demand. Our world class engineering and support teams are also unaffected and continue to build and deploy large scale AI Total Solutions. Our liquid-cooled solutions continue to ramp. We have shipped approximately 2,000 DLC liquid-cooled AI racks to customers, which we believe is more than 75% of the entire DLC liquid-cooled AI server market this calendar year. Ultimately, we remain well-positioned to deliver our broad product portfolio to you and our thousands of other customers around the world. Our primary focus remains to help you meet your IT challenges and execute your mission.

In terms of our Annual Report, the Audit Committee of the Board of Directors decided to delay the filing and, as we shared publicly, has also formed a committee to review our internal controls and other matters. The Board committee is working diligently on this thorough review.
Importantly, however, when we announced the decision to delay our Annual Report filing, we indicated that based on the work done so far, we don’t anticipate any material changes in our fourth quarter or fiscal year 2024 financial results. This is good news. I continue to have strong confidence in our finance and internal teams.

Additionally, we remain proud of our strong financial performance driven by our quest to serve your technology needs. We more than doubled revenues year-over-year in fiscal year 2024, which is more than 3 times the industry average, and we are efficiently growing our staff and investing further in innovation to enhance our capabilities. We are becoming stronger year after year.

Separately, you may have also heard about a recent report from a short-seller hedge fund that contains false or inaccurate statements about our company including misleading presentations of information that we have previously shared publicly. We will address these statements in due course. As you may know, short seller reports are designed to drive the stock price downwards to serve the short seller’s interests to the detriment of the company’s shareholders.
Your experience as our customer is our number one priority. That experience will not change. We are focused on delivering on our customer commitments and product roadmaps while continuing our robust growth and expansion to meet your evolving needs and support your business objectives.

As we look ahead to 2025, we are closing out a historic year with winning products, a record number of orders, a strong and growing backlog of design wins and leading market positions across a number of areas. Your trust in Supermicro drives that success. We are proud to be your partner and grateful for the opportunity to continue and further grow this partnership. Please do not hesitate to reach out to me or your relationship contact at the company with any questions. Thank you.
Sincerely,

Charles Liang
Founder, President and CEO
-------------------------------------------------------------------------------------------------------------------------------------------------------------
Original filing

https://www.sec.gov/Archives/edgar/data/1375365/000137536524000031/0001375365-24-000031-index.htm

AI cpps 23.00

CMG cpps 56.12

AAPL cpps 222.41

NKE cpps 79.01

PLTR cpps 35.56

31.04 and 24.42 Gaps

MAT cpps 18.90

GOOGL new gaps 154 and 151

Open Gaps
Direction Date range
up Sept-13-2024 154.82 to 155.21
up Sept-12-2024 151.5 to 152.65



Other gaps 143.18, 126.49, 117.71, 112.94

ROKU Cpps at 74.81

 CP: 450   50  150  50   / 250   0   50  50  100                    
 RB: 550  450  350  450  / 750  250 450  450 400          
 T:  1000 500  500  500  / 1000 250 500  500 500 

RIG

Cpps at 4.09

 CP: 17500  9000  9000  10000  2500  750  1000 200  / 17000  9000  6500  9000  9000  500              
 RB:  2500  1000  1000  ✔️     500   250   ✔️   0  / 3000   1000  3500  1000  1000  500           
 TP: 20000  10000 10000 10000  2500  1000  1000 200 / 20000  10000 10000 10000 10000 1000

PYPL cpps 70.21

 CP: 200   0    0    0  / 1100  0   0   0   0                  
 RB  800  500  500 500  /  900 250 500 500 500                 
 TP: 1000 500  500 500  / 2000 250 500 500 500  

SQ cpps 64.57

  CP: 450  50  150  50   / 250   0   50  50 100    
  RB  550  450 350  450  / 750  250 450 450 400        
  TP: 1000 500 500  500  / 1000 250 500 500 500 

Bld's of interest for fall: low dates to track

RBLX and RIG: end of Sept
ABNB,AMZN, DIS, GOOGL, INTC, PYPL, ROKU, SNOW, Oct
NVDA, RNG, SHOP, SQ, TSLA, TWLO, UPST, Nov

SMCI - after reverse and relax period (trk 334/33.40 gap)

Fall Capital Protect in process (sept, oct, nov)✔️
Gains only taken on those CP's
Continue until end of Nov
No washes = rebooted anytime should opportunity on low dates present
Dec 30th and 31st (Monday and Tuesday this year) Tax harvest against all gains
31 day wash out either side and repo's need to be in place by Nov 29th, ( or it's Jan 30th on the flip side)

Offshore driller Seadrill eyes asset acquisitions, M&A, CEO says
12:23:40 PM ET, 09/11/2024 - Reuters
OSLO, Sept 11 (Reuters) - Offshore drilling contractor Seadrill is looking to buy more assets or create a larger player by merging with peers, the company's CEO said on Wednesday.

Norwegian-born billionaire John Fredriksen lost the control of the company, once the world's largest driller by market cap, to its creditors over two debt restructurings since 2014.

Now a much leaner and smaller company, New York-listed Seadrill itself is looking to buy distressed assets or players with "distressed balance sheets", CEO Simon Johnson told an investor conference in Norway.

"We are not going to do anything crazy, we've proven our discipline," he said. But the amount of cash the company has on its balance sheet, "which some consider inefficient, gives us both a defensive buffer and a basis for offence", he said.

"We haven't seen the end of consolidation in (the offshore drilling market)," Johnson added.

Debt restructurings following oil market crashes in 2014 and 2020 led to a wave of consolidation in the sector, which left fewer players with fewer rigs, with drilling rates more than doubling since 2021.

"We believe that there is room for one big consolidation, especially given that our customers are also consolidating," Seadrill rival Transocean's President and Chief Operating Officer Keelan Adamson told the conference.

Johnson told the conference Seadrill remained agnostic whether it comes on top in a potential merger, or is bought by others, provided the price is good.

"We are looking to add a couple of units (drilling rigs) so we grow to 20-25 units... But we will be also open to being a junior partner in an integration provided that we get the premium that reflects the quality of our assets," he added.

Johnson declined to say whether the company was involved in any negotiations on a possible merger, when asked by Reuters.

Its top three shareholders are investment funds Bybrook Capital LLP, Canyon Capital Advisors LLC and Elliott Management Corporation, according to LSEG data. (Reporting by Nerijus Adomaitis; Editing by Jan Harvey)

Transocean LTD (RIG): The Best US Stock to Buy Under $5 Now

https://finance.yahoo.com/news/transocean-ltd-rig-best-us-163527035.html

We recently published a list of 10 Best US Stocks to Buy Under $5. In this article, we are going to take a look at where Transocean LTD (NYSE:RIG) stands against the other stocks to buy under $5.

Investors are becoming increasingly nervous amid a slowing U.S. economy. Signs of weakness in consumer spending and manufacturing points to an economy that is overheating amid the high interest rate environment

In August, nonfarm payrolls grew by 142,000, an increase from 89,000 in July but short of the 161,000 forecast. The unemployment rate decreased to 4.2%, while the “real” unemployment rate climbed to 7.9%, the highest since October 2021.

According to Dan North, an economist at Allianz Trade, the recent string of economic data has been disappointing, signaling something is wrong. A slowing economy always takes a significant toll on investors sentiments in the equity market.

The slowdown comes when the stock market is at a pivotal level heading into the year-end. The leading market indices are hovering close to all-time highs amid a slowing economy that needs the U.S. Federal Reserve to tweak its monetary policy.

The earnings season has also added another caveat seen by increased volatility. After months of blockbuster gains, significant stock sell-offs linked to artificial intelligence and semiconductors have come into play. Geopolitical worries, the forthcoming presidential race, and shifts in Federal Reserve strategy usher in uncertainty.

Valuations have gotten out of hand as most stocks are trading way above their historical highs. Given that the stock market experiences about four deep pullbacks of more than 5% every year, there is growing concern that one could be on the way heading into the year-end.

Appearing in an interview on CNBC, George Lagarias, the head economist at Forvis Mazars, stated that although it’s impossible to predict the magnitude of the Federal Reserve’s upcoming rate adjustment, he is in favor of a 25-basis point reduction. Analysts do not see the need for a 50 basis point or more reduction as it could confuse the markets and the economy, portraying a sense of urgency.

A more profound interest rate cut would take a significant toll on stocks trading at premium valuations as they would be the hardest hit with heightened volatility. On the other hand, emerging stocks that haven’t caught the Street’s attention yet could offer some good buying opportunities.

Currently, the market appears favorable for the growth of penny stocks and small-cap companies. Chris Retzler, portfolio manager at Needham Small Cap Growth Fund, suggests that while smaller companies are volatile, their long-term outlook is positive. He anticipates a market broadening in the second half of 2024, which could benefit smaller companies that have recently underperformed.

Retzler highlights the liquidity of smaller companies as a key growth factor. As funds shift from larger to smaller companies, many small-cap stocks may see significant price increases. Additionally, the expectation of lower interest rates over the next year is favorable for penny stocks, which require less capital to see price and valuation growth.

Investing in penny stocks or small-cap companies can be risky due to their volatility and limited historical data. However, these high-risk investments can also offer substantial rewards for those with a higher risk tolerance. While many of these companies face significant issues, some are hidden gems.

Our Methodology

We screened for US-listed companies that are trading under $5 and picked the stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them.

At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

Transocean LTD (NYSE:RIG)
Number of Hedge Fund Holders: 42

Current Share Price: $4.12

Transocean LTD (NYSE:RIG) is an oil and gas company providing offshore drilling services for oil and gas wells worldwide. It operates a fleet of mobile offshore drilling units comprising ultra-deep-water and harsh environment floaters. Its primary clients are integrated energy companies. Government-owned or government-controlled energy companies.

It is one of the best US stocks to buy under $5 as it is currently trading at a discount coming under pressure on the overall industry, facing challenges ranging from fluctuating oil prices to increased regulatory scrutiny. Deteriorating market conditions have pushed the stocks’ valuations to the lowest level.

Amid the deteriorating conditions, Transocean LTD (NYSE:RIG) continues to deliver solid financial results as it also inks multi-million dollar deals that should allow it to generate long-term value. It delivered an adjusted EBITDA of $284 million and contract drilling revenues of $861 million for Q2 2024. Its revenue growth over the past year has been strong at 15.07%

While the company posted a net loss of $123 million in the quarter, it inked a $123 million contract with BP that should strengthen its revenue base. It has also inked a 2-well contract with Beacon Offshore Energy.

Transocean LTD (NYSE:RIG) has also inked six new contracts, including three lucrative deals in the U.S. Gulf of Mexico, highlighting the robust demand for offshore drilling services. This is further supported by Transocean’s substantial $8.8 billion backlog, indicating a healthy pipeline of future work. Additionally, the broader energy sector, particularly offshore drilling, is experiencing positive momentum due to rising oil and gas demand. These factors boosted investor confidence and drove up Transocean LTD (NYSE:RIG)’s stock price.

While the stock trades under $5, it trades at a price-to-earnings multiple of 16, signaling its potential to generate earnings and shareholder value in the future. As of the end of the second quarter of 2024, 42 hedge funds had stakes in Transocean LTD (NYSE:RIG).

Overall RIG ranks 1st on our list of best US stocks to buy under $5. While we acknowledge the potential of RIG as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than RIG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

RIG CPPS 4.14

PATH cpps 12.45

INTC cpps 19.76

DIS cpps 90.46

ABNB cpps 118.92

DIS 86.54 gap
83.30 and 81.58
(78.73L 10/4/23)

ROKU Gap 66.19 (and possibly 70.20 as up in pretrade by 2.8?)

up Sept-11-2024 66.19 to 66.95
9/24 on W on 1 H set
CP's on greens 9/12
RB eo Oct or st Nov? TRK
6300/1500/5500

A History Of U.S. Bear Markets, 1957 to 2022

Wayne Duggan
Investing Expert Writer
https://www.forbes.com/advisor/investing/bear-market-history/

During the first 10 months of 2022, the U.S stock market was mired in a painful bear market. The post-Covid-19 supply chain crisis fueled runaway inflation, and the Federal Reserve hiked interest rates seven times that year in a campaign to get prices under control.

While the S&P 500 declined as much as 25% from its prior high-water mark, history shows that the 2022 bear market was actually milder than typical bear markets that have occurred since 1929.

Bear markets can be unpredictable, but within months of their end, they are inevitably followed by a new bull market. Savvy investors study the history of bear markets to learn what to expect and how to prepare to navigate them successfully.

What Is a Bear Market?
A bear market is a period of time during which the stock market—typically represented by the S&P 500—declines 20% or more from its last all-time high.

That’s the widely accepted definition among investors, strategists, economists and others, although there is no official definition of the term. Some experts call a market pullback of just 19% or even less a bear market.

There have been 12 bear markets since the S&P 500 index launched in 1957, including the 1990 bear market, when the benchmark index fell 19.9%. That works out to roughly one bear market every 5.5 years.

Yet despite these regular setbacks, the S&P’s total return since 1957 is more than 65,000%.

Bull markets are the flip side of the coin. A bull market is an extended period of time during which the stock market rallies more than 20% from a low-water mark. Like bear markets, there is no official definition of a bull market.

Many different factors contribute to bear markets. Recessions, macroeconomic weakness, deteriorating investor sentiment and geopolitical events like wars or elections are the main causes of bear markets.

Is the 2022 Bear Market Over?

(outdated article - so.... long over. Its now 9/11/2024)

The 2022 bear market officially ended in October 2022, when the S&P 500 hit its low point of the year.

“Last year’s bear market looked relatively average,” says LPL Financial chief equity strategist Jeffrey Buchbinder. “Without a recession, the average duration of a bear market has been seven months, with a peak-to-trough drawdown averaging -23%.”

For context, the 2022 bear market lasted 10 months, and the S&P 500’s maximum decline from its high point was 25%.

Now that the stock market has transitioned back to a bull market, LPL Financial chief technical strategist Adam Turnquist says history suggests the S&P 500 could soon break out to new all-time highs.

“Of course, we don’t know when the next bear market will arrive, but based on history, there is a good chance it doesn’t show up for quite a while,” Turnquist says. “Since 1957, the average S&P 500 bull market has lasted 59.2 months and produced an average cumulative gain of 169.3% (annualized 28.7%).”

It can be scary to buy stocks during bear markets when prices seem to keep falling. But history shows that bear market buyers have been handsomely rewarded for their boldness over the long term.

Let’s take a brief look at the history of bear markets that ended in 1957 or later.

S&P 500 Bear Markets 1956 to 2022

 Bear Market Period	          Duration   Total S&P 500 Decline 
 August 1956 to October 1957       14 months        -22% 
 December 1961 to June 1962         6 months        -28% 
 February 1966 to October 1966      8 months        -22% 
 December 1968 to May 1970         17 months        -36% 
 January 1973 to October 1974      21 months        -48% 
 November 1980 to August 1982      21 months        -27% 
 August 1987 to December 1987       4 months        -34% 
 July 1990 to October 1990          3 months        -20% 
 March 2000 to October 2002        31 months        -49% 
 October 2007 to March 2009        17 months        -56% 
 February 2020 to March 2020        1 month         -34% 
 January 2022 to October 2022      10 months        -25%

The Bear Market of 1956-1957: The Eisenhower Recession
Bear Market Duration: 14 months
S&P 500 Decline: -22%
Time to New Bull Market: 11 months

The 1956-1957 recession was triggered by uncertainties in the outlook for corporate profits and a concurrent sharp rise in bond yields. Corporate profit growth stagnated in early 1956 and began to drop in the first two quarters of 1957.

Economic conditions were worsened by a large influenza outbreak in early 1957, and the Federal Reserve applied additional pressure to the economy by raising interest rates to combat inflation.

The U.S. economy experienced a brief recession known as the Eisenhower Recession, but President Dwight D. Eisenhower jump-started the economy back to growth by implementing fiscal stimulus measures in 1958.

The Bear Market of 1961-1962: The Kennedy Slide
Bear Market Duration: 6 months
Maximum S&P 500 Decline: 28%
Time to New Bull Market: 14 months

In the early 1960s, the U.S. auto industry that had been centered in Detroit, Mich., became more globalized, and domestic auto sales and production began to decline.

In 1960 and 1961, U.S. gross domestic product dropped 2.4% and unemployment approached 7%. A stock market sell-off in early 1962 was so volatile the bear market was nicknamed the “Flash Crash of 1962” and the “Kennedy Slide” after President John F. Kennedy.

Experts blamed investor complacency for the flash crash after stock prices had gained 27% in 1961.

The Bear Market of 1966: The Great Society
Bear Market Duration: 8 months
Maximum S&P 500 Decline: 22%
Time to New Bull Market: 7 months

In 1966, the Vietnam War was escalating, interest rates were rapidly rising, Americans were struggling with inflation and investors were concerned about the possibility of a global recession. In addition to government outlays for the Southeast Asian war, funding for social programs of President Jyndon Johnson’s Great Society also had ramped up government spending.

The S&P 500 hit new all-time highs in January and March of 1966, but didn’t make a new all-time high again until early 1968. The 1966 bear market was difficult for investors, but the U.S. economy avoided slipping into a recession and the market was reportedly not a major factor in the 1966 midterm elections.

The Bear Market of 1968-1970: Vietnam and Inflation
Bear Market Duration: 17 months
Maximum S&P 500 Decline: 36%
Time to New Bull Market: 21 months

The bear market that began in December 1968 was associated with further ramping up of U.S. military spending tied to Vietnam.

While prices remained relatively stable throughout most of the early 1960s, the Federal Reserve reported that inflation jumped to 5% in 1969 from 1.7% in 1965. That marked the worst sustained period of U.S. inflation since World War II.

As a result, the effective federal funds rate rocketed up to 9.1% by August 1969 from 3.9% in August 1967. That sent stock prices tumbling.

The Bear Market of 1973-1974: The Oil Shock
Bear Market Duration: 21 months
Maximum S&P 500 Decline: 48%
Time to New Bull Market: 69 months

The bear market that began in January 1973 was associated with what became known as the oil shock recession. Later that year, Arab oil producing nations instituted an oil embargo on the U.S. in retaliation for its support of Israel in the conflict known as the Yom Kippur War. The embargo triggered a shortage of oil and a spike in oil prices that crippled the U.S. economy.

It was the most severe bear market the S&P 500 Index suffered in the 20th century until then. Stock prices dropped nearly 50% from peak to trough, and it took the S&P 500 nearly six years to reach new all-time highs after hitting its bottom.

The Bear Market of 1980-1982: Double-Dip Recession
Bear Market Duration: 21 months
Maximum S&P 500 Decline: 27%
Time to New Bull Market: 3 months

Despite ongoing inflation and rising interest rates, the S&P 500 performed relatively well in 1979, gaining about 12.3% for the year. However, inflation reached a staggering 15% in 1980. Elevated energy prices dampened economic growth.

The Fed took extreme measures to fight inflation in the early 1980s, raising interest rates as high as 19% in 1981. The U.S. economy experienced a double-dip recession in 1980 and 1981. Fortunately, the S&P 500 took just three months to fully recover from the associated bear market.

The Bear Market of 1987: Black Monday
Bear Market Duration: 4 months
Maximum S&P 500 Decline: 34%
Time to New Bull Market: 20 months

The Fed describes the stock market crash of October 19, 1987, as the “first contemporary global financial crisis.”

On so-called “Black Monday” in 1987, the Dow Jones Industrial Average—another widely followed benchmark for the broad U.S. stock market—dropped more than 22%, its largest single-day percentage drop in history. While there was no direct cause for the crash, Black Monday came after the market had already fallen sharply over several days.

Investors may have been nervous about escalating tensions between the U.S. and Iran in the Persian Gulf. Fortunately, the 1987 bear market lasted just four months.

The Bear Market of 1990: The Gulf War
Bear Market Duration: 3 months
Maximum S&P 500 Decline: 20%
Time to New Bull Market: 4 months

The bear market that began in July 1990 was associated with the Gulf War and an accompanying recession. The war was a response by a U.S.-led coalition to free Kuwait from Iraq, which had invaded it. The war sent oil prices soaring once again, forcing the Fed to raise interest rates to keep inflation in check.

Concerns over the war coupled with a weak residential mortgage market triggered a mild U.S. recession. Many U.S. savings and loan institutions had collapsed in the years leading up to the 1990 recession, leading to even tighter credit conditions.

The Bear Market of 2000-2002: Dot Com Bubble
Bear Market Duration: 31 months
Maximum S&P 500 Decline: 49%
Time to New Bull Market: 56 months

The bear market that began in March 2000 was triggered by the bursting of the Dot-Com bubble.

Fed Chairman Alan Greenspan famously mocked excess enthusiasm for tech stocks as “irrational exuberance.” But investors stayed bullish amid historically low interest rates and prolonged stock market gains throughout the 1990s. In the late 1990s, tech stock valuations soared to unsustainable highs.

When the Fed began raising interest rates in 1999 and 2000, tech stocks simply couldn’t maintain their bubble valuations. After 2000, the S&P 500 took more than four and a half years to recover to new all-time highs. The tech-heavy Nasdaq took an incredible 15 years to fully recover from the post-bubble bear market.

The Bear Market of 2007-2009: Global Financial Crisis
Bear Market Duration: 17 months
Maximum S&P 500 Decline: 56%
Time to New Bull Market: 49 months

The bear market that began in October 2007 is the most severe bear market in the history of the S&P 500. It emerged from the bursting of the subprime mortgage bubble and the global financial crisis.

In the years leading up to the crisis, financial institutions had overleveraged their balance sheets with complex securities made up of bad mortgage loans. Investors looked on helplessly as major investment banks Bear Stears and Lehman Brothers collapsed. That sparked fears about the stability of the entire global financial system. The S&P 500 dropped 56% during the resulting bear market.

The Bear Market of 2020: Covid-19 Pandemic
Bear Market Duration: 1 months
Maximum S&P 500 Decline: 34%
Time to New Bull Market: 5 months

The bear market of 2020 was associated with the Covid-19 pandemic and associated U.S. recession. The recession was unique in that it was artificially created by mandated government business shutdowns.

Stock prices crashed in February and March 2020 over concerns about the deadly outbreak. But the market quickly recovered to new all-time highs just five months later after it became clear the Covid-19 outbreak wasn’t as catastrophic or deadly as initially feared. Stock prices were also supported by more than $5.2 trillion in U.S. government stimulus.

The Bear Market of 2022: Post-Pandemic Supply Chain Crisis
Bear Market Duration: 10 months
Maximum S&P 500 Decline: 25%
Time to New Bull Market: 8 months

Unprecedented Covid-19 stimulus measures, global pandemic supply chain disruptions and Russia’s invasion of Ukraine sent U.S. inflation to its highest level in decades in 2022. The Fed was forced to aggressively raise interest rates, which triggered a sell-off in growth stocks and tech stocks.

Fortunately, the labor market has remained resilient, and concerns the Fed would trigger a “hard landing” recession have proven unwarranted so far. In fact, inflation has been trending steadily lower since the S&P 500 bottomed in October 2022.

Bear Market Close Calls
Market watchers generally include 1990’s setback among the modern full-fledged bear markets. The 19.9% plunge by the S&P 500 rounds off to 20%.

It was more severe than many other bear markets in terms of how much of the prior bull market it wiped out, says Sam Stovall, Chief Investment Strategist of CFRA Research.

Additional post-1957 market pullbacks came close to achieving bear market status but fell short. Many investors lump them in with conventional bear markets anyway.

Late 1970s Stagflation Period
Downturn Duration: 17 months
Maximum S&P 500 Decline: 19%
Time to New Bull Market: 17 months

The market downturn that began in September 1976 was not nearly as severe as the oil shock recession and bear market just a few years earlier. But it was painful nonetheless.

There was no U.S. recession associated with the bear market of the late 1970s. Yet the U.S. economy was still dealing with stagflation—a period in which inflation is historically high and economic growth stagnates. In 1979, prices for West Texas Intermediate (WTI) crude oil reached new all-time highs, approaching $150 per barrel in 2023 dollars.

The 1998 Asian Currency Crisis
Downturn Duration: 1 month
Maximum S&P 500 Decline: 19%
Time to New Bull Market: 3 months

Investors generally think of the 1990s as one of the biggest and most prolonged bull markets of all time. The late 1990s were a particularly strong period of growth for tech stocks. But the period became known as the Dot-Com bubble due to its sudden demise.

The market run-up before the bubble burst was not, however, uninterrupted. Several Asian countries experienced financial crises in late 1997. In 1998, the S&P 500 hiccuped. Many investors have forgotten that brief 19% pullback. Around the same time, Russia was forced to devalue its currency.

The global currency volatility triggered a sharp one-month pullback by the S&P 500 that was quickly forgotten after the index bounced back and hit new all-time highs just three months later.

The 2011 European Debt Crisis
Downturn Duration: 6 months
Maximum S&P 500 Decline: 19%
Time to New Bull Market: 4 months

The market tumble of 2011 began with a sovereign debt crisis in Europe. Standard & Poors also issued its first U.S. credit downgrade in history following a political dispute in Congress about the U.S. debt ceiling.

Fortunately, lawmakers eventually reached a deal on the debt ceiling, and Europe ultimately approved bailout packages for Greece, Ireland, Portugal, Spain and Cyprus.

The 2018 Fed Rate Hikes
Downturn Duration: 3 months
Maximum S&P 500 Decline: 19.8%
Time to New Bull Market: 4 months

The market fell 19.8% in 2018. Like the 2011 and 1998 pullbacks, it was a brief, shallow downturn triggered by concerns that a U.S. recession could be imminent.

Investors believed the Fed was raising interest rates more rapidly than the economy could digest, and experts saw slowdowns in the auto markets and housing markets as red flags for the economic outlook. Fortunately, the economy avoided a recession and this mini bear market lasted just three months.

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