One of the things I notice in the bullish arguments for Marvell (NASDAQ:MRVL)
is that there's a lot of talk about the company's "strong IP" and the
likelihood that an appeals court will overturn a $1 billion-plus patent
judgment against the company. The trouble with that is that Marvell
hasn't given anybody particularly strong reasons lately to believe that
they can translate IP into sustainable market share and the patent
judgment reversal (if that indeed happens) is a one-time event.
As
is, it's hard to find a strong argument to buy and hold Marvell for its
turnaround qualities. The storage business seems to be incapable of
supporting sustained growth, and I think the company's Quixotic quest to
remain a player in mobile is bleeding away value. Last and not least, I
see no particular signs that networking chip companies like Broadcom (NASDAQ:BRCM) and Cavium (NASDAQ:CAVM) are, or should be, worried about Marvell's efforts in this market.
I
do believe that ditching the mobile business could add $1.50/share in
value relatively quickly and a substantial reduction in the patent award
could add another $2/share. Those two events would be worth around a
20% return, but neither are certain. What's more, absent a better vision
from management regarding what Marvell does (and does not) actually do
well, it's hard to regard this as more than a trading candidate.
Read more here:
Unable To Find A Foothold, Marvell Keeps Sliding
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