Hacker News new | ask | show | jobs
by tcoppi 3597 days ago
I don't think they are in any danger of bankruptcy. Whether they return to profitability is still an open question but it seems likely that they should be by some point next year. How profitable, and what happens after that, is anyone's guess. There is a lot of room to grow in the graphics and CPU space, but they have tough competitors. I do think their stock is very fairly valued at ~$6 though, I think any potential gains from Zen over the next year or so are priced in to that. It definitely isn't a value buy anymore.

Edit: As the day goes on it seems like they're trading back over $7, so obviously the market disagrees with me :) They were trading around $10 before losing profitability, and in the $20-$40 range during their mid-2000s heyday, so maybe the market is expecting performance closer to that. I think that is optimistic still, but again who knows.
1 comments
blueprint 3597 days ago
IMHO it's not actually possible for something to ever be 100% priced in, which has the surprising meaning that people need to also discuss how much of an event is priced in when they speculate whether something is or isn't priced in.
link
Obi_Juan_Kenobi 3597 days ago
People tend to ignore the inherent risk of time when considering something 'priced in'.

If an event is set to happen in an hour, you can be fairly certain it will happen, so it should be strongly 'priced in'. If it's happening months or years out, a lot could happen in the meantime, thus it's not 'fully' priced in. It's not a discrete event, but rather some sort of curve (perhaps sigmoid?) that depends on perceived risk.

link
vanattab 3597 days ago
Can you elaborate on your meaning?
link
blueprint 3596 days ago
Please see my reply to eximius.
link
eximius 3597 days ago
Why is it impossible?
link
blueprint 3596 days ago
It can be virtually guaranteed that not everyone who might buy or sell will know about and properly understand a given event.
link
eximius 3595 days ago
People can be correct for the wrong reasons, though. Wisdom of the crowds (and the Central Limit Theorem) would make me expect that it would be very close is most cases, with random noise being the most common distance from the truth.
link