I wasn't overly fond of Atmel's (NASDAQ:ATML)
valuation back in March, but I did think there was a chance that this
chip company would see itself swept up in the M&A boomlet across the
chip industry. The market thought so too, taking the shares up almost
20% at the peak after my last article.
Then harsh reality started to set in, as markets like computing,
handsets, and general industrial started looking weaker and weaker. All
told, the shares sit about 6% lower than where they were at the time of
that last writing, but now sentiment is definitely more sour - on chips
in general and Atmel's execution/guidance issues in particular.
I
still think that a sale of the company is a distinct possibility. The
company's microcontroller business represents a relatively scarce asset
that could appeal to companies ranging from Analog Devices (NASDAQ:ADI) to Microchip (NASDAQ:MCHP) to Texas Instruments (NASDAQ:TXN), with Avago (NASDAQ:AVGO) and Qualcomm (NASDAQ:QCOM)
as potential long-shot bidders as well. If the company doesn't sell,
better execution is an absolute must and likely to be the first priority
for the new (and as of yet unannounced) CEO. Atmel does have a
legitimate opportunity in front of it with increasing chip content in
autos and the growth of Internet of Things (or IoT) applications, but
past foibles make it an entirely legitimate question as to if the
company can actually deliver on the potential.
Read the full article here:
Softer Markets And Weak Execution Are An Ugly Mix For Atmel
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