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Posts Tagged ‘Portia Crowe’

IT’S OFFICIAL: Intel is buying the autonomous-driving company Mobileye for $15.3 billion

A device, part of the Mobileye driving assist system, is seen on the dashboard of a vehicle during a demonstration for the media in Jerusalem October 24, 2012. REUTERS/Baz RatnerMobileye technology.Thomson Reuters

Intel is buying the Israeli autonomous-driving company Mobileye for $63.54 a share in cash, or about $15.3 billion.

Mobileye soared about 30% in premarket trading Monday after the Israeli newspaper Haaretz broke the news.

The Jerusalem-based company develops vision-based driver-assistance tools to provide warnings before collisions.

“Mobileye brings the industry’s best automotive-grade computer vision and strong momentum with automakers and suppliers,” Intel CEO Brian Krzanich said in a statement.

“Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers.”

Tesla began incorporating Mobileye’s technology into Model S cars in 2015.

In January, it announced it was developing a test fleet of autonomous cars together with BMW and Intel.

Mobileye was cofounded in 1999 by Amnon Shashua, an academic, and Ziv Aviram, who is the CEO. Goldman Sachs and Morgan Stanley took it public in 2014.

Here’s the full press release:

SANTA CLARA, Calif. & JERUSALEM–(BUSINESS WIRE)–Intel Corporation (NASDAQ: INTC) and Mobileye N.V. (NYSE: MBLY) today announced a definitive agreement under which Intel would acquire Mobileye, a global leader in the development of computer vision and machine learning, data analysis, localization and mapping for advanced driver assistance systems and autonomous driving. Pursuant to the agreement, a subsidiary of Intel will commence a tender offer to acquire all of the issued and outstanding ordinary shares of Mobileye for $63.54 per share in cash, representing an equity value of approximately $15.3 billion and an enterprise value of $14.7 billion.

The combination is expected to accelerate innovation for the automotive industry and position Intel as a leading technology provider in the fast-growing market for highly and fully autonomous vehicles. Intel estimates the vehicle systems, data and services market opportunity to be up to $70 billion by 2030. This transaction extends Intel’s strategy to invest in data-intensive market opportunities that build on the company’s strengths in computing and connectivity from the cloud, through the network, to the device.

This acquisition will combine the best-in-class technologies from both companies, spanning connectivity, computer vision, data center, sensor fusion, high-performance computing, localization and mapping, machine learning and artificial intelligence. Together with partners and customers, Intel and Mobileye expect to deliver driving solutions that will transform the automotive industry. The combined global autonomous driving organization, which will consist of Mobileye and Intel’s Automated Driving Group, will be headquartered in Israel and led by Prof. Amnon Shashua, Mobileye’s Co-Founder, Chairman and CTO. The organization will support both companies’ existing production programs and build upon relationships with automotive OEMs, Tier-1 suppliers and semiconductor partners to develop advanced driving assist, highly autonomous and fully autonomous driving programs. Intel Senior Vice President Doug Davis will oversee the combined organization’s engagement across Intel’s business groups and will report to Prof. Amnon Shashua after the transaction’s closing.

“This acquisition is a great step forward for our shareholders, the automotive industry and consumers,” said Brian Krzanich, Intel CEO. “Intel provides critical foundational technologies for autonomous driving including plotting the car’s path and making real-time driving decisions. Mobileye brings the industry’s best automotive-grade computer vision and strong momentum with automakers and suppliers. Together, we can accelerate the future of autonomous driving with improved performance in a cloud-to-car solution at a lower cost for automakers.”

“We expect the growth towards autonomous driving to be transformative. It will provide consumers with safer, more flexible, and less costly transportation options, and provide incremental business model opportunities for our automaker customers,” said Mr. Ziv Aviram, Mobileye Co-Founder, President and CEO. “By pooling together our infrastructure and resources, we can enhance and accelerate our combined know-how in the areas of mapping, virtual driving, simulators, development tool chains, hardware, data centers and high-performance computing platforms. Together, we will provide an attractive value proposition for the automotive industry.”

As cars progress from assisted driving to fully autonomous, they are increasingly becoming data centers on wheels. Intel expects that by 2020, autonomous vehicles will generate 4,000 GB of data per day, which plays to Intel’s strengths in high-performance computing and network connectivity. The complexity and computing power of highly and fully autonomous cars creates large-scale opportunities for high-end Intel® Xeon® processors and high-performance EyeQ®4 and EyeQ®5 SoCs, high-performance FPGAs, memory, high-bandwidth connectivity, and computer vision technology.

Transaction Details and Timing

The transaction is expected to be accretive to Intel’s non-GAAP EPS and free cash flow immediately. Intel intends to fund the acquisition with cash from the balance sheet.

The transaction is expected to close within the next nine months. It has been approved by the Intel and Mobileye Boards of Directors and is subject to the receipt of certain regulatory approvals and other closing conditions. The offer is not subject to any financing conditions.

An Extraordinary General Meeting of Mobileye’s shareholders will be convened in connection with the offer to adopt, among other things, certain resolutions relating to the transaction.

For further information regarding the terms and conditions contained in the definitive agreement, please see Intel’s Current Report on Form 8-K and Mobileye’s Current Report on Form 6-K, which will be filed with the Securities and Exchange Commission in connection with this transaction. The offer will be described in more detail in a tender offer statement on Schedule TO to be filed by Intel and one or more of its subsidiaries and a solicitation/recommendation statement on Schedule 14D-9 to be filed by Mobileye.

Citi and Rothschild Inc. serve as financial advisors and Skadden, Arps, Slate, Meagher & Flom LLP serves as legal counsel to Intel. Raymond James & Associates, Inc. serves as financial advisor and Morrison & Foerster LLP serves as legal counsel to Mobileye.

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   Inside the Johns Hopkins finance class that’s ‘guaranteed’ to get you a job on Wall Street

Steve Hanke Johns Hopkins finance classPortia Crowe/Business InsiderProfessor Steve Hanke designed the course to produce “the top people in the country.”

Kelly Chu stands at the front of the room and explains a complex spreadsheet displayed on a projector.

With precision she describes the discounted free cash-flow model she built of a food-services and construction company, and walks through its revenue-growth assumptions before making a recommendation on whether or not to invest.

Chu is not a wealth manager or an investment banker. Wearing flip-flops and jeans, the 21-year-old is a junior at Johns Hopkins University, and she’s presenting to her applied economics and finance class, a course at a non-Wall Street target school that guarantees its alumni top jobs on the Street, according to the professor.

Chu’s classmates are other undergraduates (during a discussion of the Russian-ruble crisis of 1998, a student points out she was 4 years old). They look like other 20-somethings in a Friday-afternoon seminar, with their heads in hand and droopy-eyed faces buried in laptops. You wouldn’t know they’re even paying attention, but when the professor tosses out an unexpected question — about an intricate math equation or the name of a Nobel laureate — they snap back answers in seconds.

Professor Steve Hanke, who’s been at Hopkins for 45 years, created the course two decades ago. It’s evolved but has always focused on “producing the top people in the country.”

Steve Hanke Johns Hopkins finance classPortia Crowe/Business InsiderThese students are heading to jobs and internships on Wall Street.

Most graduates become analysts, though a minority go into trading. (Hanke has been a currencies and commodities trader for over 50 years.) They all come away with job offers from their first-choice banks or hedge funds, despite Hopkins not having a business school.Of the 20 students of Hanke’s who are graduating this year, eight are going to JPMorgan. The rest took jobs at Goldman Sachs, Morgan Stanley, Bank of America Merrill Lynch, UBS, Deutsche Bank, Jefferies, Stifel, T. Rowe Price, Campbell and Co., and Millennium Management. Most of the sophomores and juniors took summer internships on Wall Street too.

Danny Elkins, who’s graduating in May, said he feels indebted to Hanke for the experience.

“We don’t have the kind of resources or the kind of connections of Princeton or Harvard or Duke,” he said. “But if you’re in this class, then I think you have something great to talk about during interviews. It can give you good ideas for stock pitches in interviews.

“I don’t think my situation would have ended up like it did if I hadn’t had the opportunity,” he said.

Elkins’ situation turned out well: He got five job offers from top firms and will be heading to JPMorgan’s asset-management department.

Steve Hanke Johns Hopkins finance classPortia Crowe/Business InsiderStudents build their own models every two weeks.

Students are allowed to take the course for credit up to three or four times, but the challenge is getting into it.Students have to submit résumés and transcripts and a have one-on-one interview with Hanke. (The bar is high: Most students have at least 3.7 GPAs.)

Every two weeks students build a model on a company assigned by Hanke or his informal assistant, Ryan Guttridge, a fellow at the Johns Hopkins Institute for Applied Economics.

On off weeks, students write papers about their models, and then spend class time analyzing their findings together. Most MBA programs, Hanke notes, require students to build only one or two models throughout their entire program.

That they’re building these models so frequently helps give them a leg up, but the real reason for their success could be the unusual type of models they’re building.

Steve Hanke Johns Hopkins finance classPortia Crowe/Business InsiderThe models are based on a unique discount free cash-flow system developed by Professor Hanke and Ryan Guttridge, an informal participant in the class.

Hanke and Guttridge developed their own modeling system to teach to the students. They build free cash-flow statements from scratch — meaning from SEC filings, not from data providers or other unverifiable sources.Then they measure drivers of cash flow, like revenue and margins, via Monte Carlo simulations, a technique that uses random sampling and runs multiple trials to home in on the probability of outcomes.

They end up with a distribution of share prices, instead of a single point value or price estimate, and look to buy stocks that are priced on the cheaper side of the distribution and have a higher probability of the price increases.

“Ultimately, when you’re buying a stock, you’re buying a series of cash flows — a series of expected cash,” Guttridge said.

For him, modern finance faces a big problem because most analysts’ forecasts ignore that distribution. “What isn’t in the analysis is that the risk has totally changed,” as share prices increase, he said.

The students follow a nearly 50-step process to build these models:

And while it may not be as sexy as rattling off a price estimate on the spot in a job interview, in a way this training gives the students some control in interviews.

“They’re interested but they don’t know a lot about it, so instead of them grilling you and putting you on your toes, you’re kind of explaining to them what you did,” says Elkins.

Steve Hanke Johns Hopkins finance classPortia Crowe/Business InsiderMost of the students are undergrads, but they’re beating out MBA grads for Wall Street positions.

Plus, he said, “When you start out the interview and you start talking about the nuances of the model … you can skip the basic accounting questions, and it allows you to differentiate yourself.”Guttridge said their model is not unique; it closely resembles billionaire investor Warren Buffett’s thinking, he said. Especially the part of Buffett’s 2013 letter where he talks about buying a farm.

“He says, ‘I’m going to buy the farm and on average I know what the farm’s going to produce,'” Guttridge said. “That’s exactly what we do. We just have a very formal, fairly rigorous framework around it.”

Guttridge said their model is akin, philosophically, to private equity firms. That’s because the distributions they come up with are most accurate when they’re not faced with time constraints, and private equity firms don’t have the kinds of calendar-year deadlines that investment banks do.

So it makes sense that many of their students wind up in private equity.

Steve Hanke Johns Hopkins finance classPortia Crowe/Business InsiderHanke and Guttridge said they’d hire their own students if they could beat Wall Street to it.

Some recent grads have even been recruited to private equity right out of college, according to Hanke, which is extremely rare. Usually, those firms recruit the cream of the crop from analysts at major investment banks.”I think the students are higher quality and more skilled than the first-year analysts that are on the Street right now,” said Hanke.

They’re high enough quality that he and Guttridge regularly use their classwork to make investment decisions for their wealth-management firm, Hanke-Guttridge Capital Management, which they founded in 2013.

They’d hire their own graduates, they said, if they only could beat Wall Street to it.

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