Premium Essay

Analysis of Intel and Ebay

In: Business and Management

Submitted By agnes1324
Words 1166
Pages 5
1. Discuss whether the analysts following Intel appear to have been influenced by any biases, both generally and in their reaction to Intel’s announcement in September 2000 (3 marks).

2. Discuss whether James Stewart’s assessment of eBay reflects any biases (3 marks).

3. In what ways are the events described at Intel and eBay similar and in what ways are they different (4 marks)?

Question # 1

Brandt Cornell’s paper “Is the response of analyst to information consistent with fundamental valuation?” reveals that analyst recommendations are pro cyclical. As bad news arrives and the underlying price of the firm’s stock goes down , analyst downgrade company , the opposite effect arises when good news arrives. As Cornell says , this leads to a positive feedback loop. Thus, if analyst recommendations influence investor actions , then such a feedback could strengthen price movements in both direction. recommendation on DCF valuation but instead relied on representativeness. Debondt and Tahler (1990 found a tendency towards overreaction in forecast changes and under reaction in forecast revisions. As in the case of Intel , managers responded that market had overreacted. Debondt and Tahler also found overreaction for positive forecast modifications and under reaction for negative forecast modifications. Finally, they also found that overreaction, under reaction and excess optimism increase with forecast horizon suggesting that the longer the prediction horizon, the larger the prediction bias. Furthermore, Cornell ,Conrad and Landsman (2000) prove that as the level of the market rises , individual stock becomes more sensitive to bad news.
Analyst who followed Intel appear not to have based their recommendation on DCF. According to Bloomberg ,virtually none of the28 analysts reports on Intel, examined DCF valuation analysis .Additionally,…...

Similar Documents

Free Essay

How to Enhance Strength of Intel in Swot Analysis

...RECOMMENDATION 3.1To enhance the strength of Intel in SWOT analysis Strong brand image and strong brand name Intel has a strong brand image and strong brand name among the companies in the world. Intel is one of the most valuable brand in the world, so they should grow the value of their brand as they evolve the company. The evolution will allow Intel to establish a stronger connection with their customers and strengthen their overall position in the marketplace. They can re-design logos for their individual processors and other Intel technologies. Customer loyalty Customer loyalty is very important for a company to maintain its position in the market. Intel should concern more with customer satisfaction and customer loyalty. Tracking customers’ feedback should be a priority to ensure that they always know what customers want and need. Customer follow up can be conducted through phone or email survey to monitor the pulse of a customer base. Heavy investment in R&D For decades, Intel Corporation has invested heavily in its R&D department to developed technologies enabling the computer and internet revolution that has changed the world. Since innovation is the foundation of Intel’s business, they should protect their intellectual property rights and research and development (R&D) investments which include patents, copyright, trademarks and trade secrets. To enhance the opportunities of Intel in SWOT analysis Expand the growing market PC chips now......

Words: 607 - Pages: 3

Premium Essay

Ebay Analysis

...• The biggest on-line electronic exchange platform • The eBay brand • First mover advantage • An active and vocal community of users • Learning from experience Unique competences • A unique form of account management that balances central control versus decentralised community involvement • Leadership in terms of ability to renew the Board and keep a sense of consistency • Electronic platform management skills • Partnering on the internet (deciding when and how to compete) • Web 2.0 management skills You might choose activity mapping or value chain analysis to get into the specifics here. It is important to recognise that it is not a single competences that matter so much as linkages between activities. INTRODUCTION eBay Incorporated, a US company headquartered in San Jose, California, provides online marketplaces for the sale of goods and services, online payments services, and online communication offerings to individuals and business in the United States and internationally. With more than 90 million active users globally, their collective impact on e-commerce is staggering: In 2009, the total worth of goods sold on eBay was $60 billion — $2,000 every second. The business strategy of eBay is exemplified in the company’s mission statement, “eBay’s mission is to provide a global trading platform where practically anyone can trade practically anything”. In the following report, I will analysis eBay’s business including their financial statement,......

Words: 2648 - Pages: 11

Premium Essay

Ebay Accounting Analysis

...1. Ebay Strategy Analysis Strengths | Weaknesses | Global Leadership for Online AuctionsBusiness ModelCustomer Relations ManagementPaypal | Need to Overcome Fraudulent TransactionsVulnerable to system breakdownsLack of New Ideas | Opportunities | Threats | New and Emerging MarketsMarket Penetration | CompetitionConsumer ConfidenceUncontrollable Cost | Strengths Global Leadership for Online Auctions Ebay is a giant marketplace used globally to buy and sell things of wide variety around the world. This is the top of the mind way of selling or buying things in the internet. No other companies can even come second to Ebay when it comes to providing a place where sellers and buyers meet. Business Model The company has essentially zero cost. They do not have warehouses to store goods, nor do they have employees to pay to maintain a store. The business model is simple and effective. People can sign up and just start buying or selling in an auction type setting. Unlike the other auction sites where people feel that they are not getting ripped of their money, the auction in ebay is transparent. You don’t pay for a price over your valuation of the item. Customer Relations Management Ebay can costlessly collect data from buyers and sellers because they have to sign up for an account before they can make transactions. This data is a valuable asset towards understanding people’s attitudes in buying or selling. Buyers and sellers can leave feedback to one another......

Words: 1886 - Pages: 8

Premium Essay

Intel Financial Analysis

...Cost of bonds (Rd) (1-.26)(2.503%) = 1.85% cost of bonds/ debt Does the company have any preferred stock? If so, calculate Rps Intel does not have any preferred stock. Estimate the cost of common stock Rs using CAPM (aka, the required return) http://finance.yahoo.com/bonds dividend and yield=4.20%(on yahoo finance summary for intel page) CAPM Rs=Rf+Beta(E(RM)-Rf) 10 year Treasury bond rate Rf= 1.81% Beta =0.98 10 year (2003-2013) arithmetic average of S&P500 = 5.69% MRP= 6.675 – 1.81 =4.86% Calculate beta using monthly returns for the past 24 months and the market model. Tell me a little bit about R2, R2 for this company, and what it means. Beta= 0.91 Rs = 1.81+ 0.91(4.86) = 6.23% R squared = 0.293879903 (SPY as Benchmark) 2.3 WACC estimation Compute WACC WACC = wd rd (1-T) + wps rps + ws rs = (13.3B/64.6B*1.85) + 0 + 51.2B/64.6B* 6.23% = 5.3% Investors use WACC to help decide whether a company represents a good investment opportunity. To some extent, WACC represents the rate at which a company produces value for investors—if a company produces a return of 20% and has a WACC of 11%, then the company creates 9% additional value for investors. If the return is lower than the WACC, the business is unlikely to secure investment. Also compute WACC using the arithmetic average of Rs from my website. Rs for Technology sector is 16.27% WACC = 13.3B/64.6B*1.85 * (1-26%) + 0 + 51.2B/64.6B* 16.27% = 13.28% Tell......

Words: 1008 - Pages: 5

Premium Essay

Intel Financial Analysis

...Intel Corporation is a [$105 billion] (King, 2012) leading designer and manufacturer of advanced integrated digital technology platforms. The company, led by CEO Paul S. Otellini, also specializes in the development and sales of software and services that integrate security and technology (Intel, 2013). Intel currently dominates the semiconductor market, and has for the last 20 years. In 2011, the company made up a record 16.5% of the server market share (Gaudain, 2012). To date, the company employs 150,000 people worldwide. Intel’s “…goal is to be the preeminent computing solutions company that powers the worldwide digital economy” (Intel, 2013). Intel’s performance and future perspectives are discussed using the methods of horizontal and vertical analysis and key ratios obtained from Intel’s 2010- 2012 financial statements. Using horizontal analysis of the 2010-2012 condensed classified balance sheet, there has been a significant improvement in the financial indicators of Intel Corporation. 1) Current assets have increased significantly from 2011 to 2012 by 21.20%. The 2012 increase shows great improvement compared to the decrease in current assets in 2011 by (18.16%) based on 2010 current assets of $31, 611 million. Current assets show a sizeable increase from $25,872 million in 2011 to $31,358 million in 2012. 2) Property, plant, and equipment (PPE) has also showed a steady increase from $17,899 million in 2010 to $27,983 million in 2012, a 56.34% improvement. ......

Words: 928 - Pages: 4

Premium Essay

Ebay Analysis

...Managerial Analysis By: Aneli, Jeanille, Monica, and Daniel Contents Company Overview…….……………………….....……Page 3 History...…………………………………………….……….…Page 4 Historic Timeline………………….…………….…..…….Page 5 Financial Overview...…………………….…………….…Page 6 SWOT Analysis…………………….……………..….…..….Page 7 Working at eBay......................….............Page 9 International Locations……………………………..….Page 10 Company Overview EBay is the largest online marketplace in the world. EBay has became one of the most popular auction sites we know of today. One can find more than 18,000 categories of merchandise on eBay, including big-ticket items such as cars and real estate. EBay is not so much an e-commerce site as it is a trading community, where buyers are sellers find one another and conduct transactions. It currently has approximately 88 million active users around the world. The company has since expanded by acquiring innovative businesses, such as Shopping.com, Stub Hub, Bill Me Later and others, which have positioned the company as the global leader in e-commerce and payments. They introduced PayPal which makes it easy and quick to send and receive payments online. They have also acquired Skype, Rent.com, and Half.com. Throughout the years, eBay has accomplished many things. In 1998, the eBay Foundation was established. It engages eBay employees through charitable giving and volunteerism. The eBay community has raised more than $165 million for charity and more than......

Words: 1352 - Pages: 6

Premium Essay

Ratio Analysis of Intel and Microsoft in 2013

... Ratio analysis of Intel and Microsoft in 2013 LNU SWIBS Management 3 Ellie 126602308 The two companies I chose are Microsoft Inc.’s and Intel Corporation’s. Microsoft. Based on the compare with these ratios, we could do some fundamental analysis of risk level and profitability of Intel and Microsoft, to appraise the financial performance and financial position of two companies. The relative ratios of two companies are calculated as follows: Ratio | Intel | Microsoft | return on equity=net profitsharesholder's funds(equity)×100% | 962058256=0.17 | 496578944=0.06 | asset turnover=salessharesholder's funds(equity)×100% | 5270858256=0.90 | 1989678944=0.25 | net profit margin=net profit (before or) after taxsales×100% | 962052708=0.18 | 496519896=0.25 | gross profit=gross profitsales×100% | 3152152708=0.60 | 1429419896=0.72 | operating profit=operating profitsales×100% | 1229152708=0.23 | 607319896=0.31 | current ratio=current assetscurrent liability×100% | 3208413568=2.36 | 7491828774=2.60 | stock-holding period=inventorycosts of sales×365 | 417221187×365=71.8 | 19385602×365=126 | average debtors collection period=trade receivablessales×365days | 617652708×365=42.8 | 1911819896×365=350.7 | average creditors payment period=trade payablessales×365days | 1119121187×365=192.8 | 101825602×365=663.4 | gearing=all borrowingssharesholder;s funds(equity)×100% | 1316558256=0.23 | 1260178944=0.16 | The ratio will be analyzed from four areas of interest: profitability,......

Words: 2269 - Pages: 10

Premium Essay

Ebay Analysis

...eBay, Inc. (2002) Overview eBay 2002 Founded in 1995 by Pierre Omidyar and Jeff Skoll, the eBay online marketplace was developed in order to provide individuals a place to sell goods and services. eBay became a phenomenon that attracted some 10 million auctions in its first three years. This success provided eBay the necessary foundation to complete an initial public offering (IPO) in 1998. eBay’s online auction concept is relatively simple. Sellers register with eBay and use its suite of online tools to place nearly any item up for sale. Buyers navigate eBay’s vast array of categories or use search functionality to find goods or services that they wish to bid on. Once the auction is won, the buyer may use PayPal, the online payment service, to complete the transaction. Perhaps the most powerful part of the eBay process lies with the feedback scores that are given by both buyer and seller following the completion of the transaction. Feedback scores are public information and allow other buyers and sellers to determine whether a person is worthy of doing business with or not. A negative feedback on eBay is akin to having a bad credit score with a bank. By providing a marketplace for “new and scarce goods, end-of-life products, and used and vintage items,” eBay provides a valuable service in which they attempt to “make inefficient markets more efficient.[1]” While other Internet business models have failed in recent......

Words: 5371 - Pages: 22

Free Essay

Intel Case Analysis in China

...How would you have handled the situation with Li? Tang should address the Intel Architecture Development Co., Ltd (IADL) issues of downward and upward miscommunication by first talking to Li’s direct supervisor, Cheng, about the Intel philosophy of "disagree and commit". The Intel strategy should be discussed and linked to Li's skill set and with future assignments. Specifically, recognition should be given to Li's Chinese culture competency skills. All similar organizational and national culture context should be assessed. Tang could then review the different options for the manual project after considering recommendations from Cheng. A pointed conversation between Cheng and Li about the project’s correlation to Intel Strategy should occur to ensure commitment and understanding. Ultimately, a decision by Tang can be made to either cancel ,modify, or reduce Li’a project to a more attainable goal. Guanxi is a Chinese value of how organizations and people build relationships. Li had earned a high level of Guanxi by working with external and internal customers on his project. Face is another Chinese cultural term that means image , social standing and respect. The abrupt end of the manual project was perceived by Li as losing face, being disgraced , embarrassed, and becoming a social outcast. Instead of canceling the project, Tang could prevent Li from being dishonored by considering a negotiation with Cheng and Li about the description of the project. Reducing......

Words: 2053 - Pages: 9

Free Essay

Ebay Analysis

... [pic] eBay, A Company Analysis [pic] Analyzing, eBay’s Strategies, Financial Performance, S.W.O.T, and Competitive Strength in the Online Auction Industry Prepared for: Dr. Patrick Kreiser Prepared By: Katelynn Coghlan Tommy Pauley Patrick Scott October 26, 2005 There is no doubt that eBay holds the power in the online auction industry. An analysis of the key factors of their company was compiled to find out what the eBay strategy is, and how they are doing financially. Also an internal analysis of their strengths and weaknesses and an external analysis of their opportunities and threats have been provided. Finally, a strength assessment of the main competitors in the online auction industry has been determined to see how strong each competitor is. From its beginning in a San Francisco living room, eBay has grown to be in a league by itself. Analysis of eBay’s Strategy and Business Model Before eBay could begin to compete in the online auction industry a strategy and business model needed to be developed (Appendix A). eBay had to define the businesses they would be competing in and how they would compete in those specific businesses. They also needed to define how they would be a successful service to their customers. Corporate level strategy eBay’s corporate level strategy was to become a diversified business. They wanted to diversify not only the products they offered but also their customer base and global reach. By......

Words: 4036 - Pages: 17

Premium Essay

Intel

...capitalization was above $500 billion, making it the largest firm in the world. Then on Thursday, September 21, 2000, Intel issued a press release indicating that its revenue for the third quarter would grow between 3 percent and 5 percent, not the 8 to 12 percent that analysts had been forecasting. In response to this news, Intel’s stock price dropped by 30 percent over the next five days. Intel’s chairman, Craig Barrett, commented on the reaction, stating: “I don’t know what you call it but an overreaction and the market feeding on itself.” An academic study found that at the time, virtually none of the analysts following Intel used discounted cash flow analysis to estimate the fundamental value of Intel’s stock. Instead, the study points out that analysts react to bad news in the same way that a bond-rating agency reacts to bad news. Just as a bond-rating agency would downgrade the firm’s debt, analysts downgrade their stock recommendations. After Intel’s press release, approximately one-third of the analysts following the firm downgraded their recommendations. Some of the recommendation changes were extreme. Notably, the cumulative return to Intel’s stock, relative to the S&P 500, displayed a negative trend for the period September 2000 through September 2002. In what some might see as a replay of history, consider an event that took place at the online firm eBay during January 2005. Between the end of 2002 and the end of 2004, eBay’s shares increased by over 200......

Words: 550 - Pages: 3

Free Essay

Intel Swot Analysis

...SWOT Analysis of Intel Corporation Strengths: The Intel Corporation is the largest producer of computer processors and motherboards in the world. Holding 80% of the market share in the private, public and military sectors, Intel has been well rooted in the computing industry since it's inception 46 years ago. (Reuters) One of Intel's biggest strengths is it's high commitment to research and development. Intel has acquired many software and hardware companies over the past decade. These have boosted Intel's technological reach, allowing them to enter more into the software side of computing and expanding AI and user interface capabilities (TechCrunch). With a third quarter revenue of $14.6 billion, Intel owes some of it's growth to it's newly developed and acquired mobile phone markets.(Intel) With the world of computing technology being ever changing, Intel has stayed on top of it's competition as it reduces the size of its chips, to fit the smaller devices of today, without sacrificing the growing power of it's processors. Their in house manufacturing is also a great advantage, without having to pay another company to produce their chips. Intel is also a praised company when it comes diversity. With Intel's diversity initiative, it has many employee diversity groups based on race, nationality, religion and sexual identity. (Intel) In 1994, Intel was even one of the first companies to start a gay, lesbian, bisexual and transgender employee group. Intel has received......

Words: 1171 - Pages: 5

Premium Essay

Ebay Case Analysis

...sell their own personal items to anyone with internet access at any time. eBay is full of much strength such as their ability to globalize their brand. This is also one of their main weaknesses. Since eBay is an online business, anyone with internet can access the website. While they have the potential to reach out to everyone, not everyone uses the internet. One of the issues eBay faces is that the internet usage in Asia is very low especially considering over half the population resides there. E commerce was growing everywhere which definitely helps eBay’s business. One of eBay’s great accomplishments is their ability to acquire several other successful businesses. They don’t just take over random businesses because they can; they acquire businesses that can help them out with their own business. For example, PayPal goes hand in hand with the type of business eBay runs. It gives users a more secure way to use their website which consumers definitely appreciate. Along with their feedback forum which allows consumers to voice their opinions, the fact that both sides (buys and sellers) feed off one another and cause the popularity of the other side to rise really makes consumers feel like they are a part of the business. This is part of what makes eBay such a great success. Although they have their share of challenges with globalization and competition, they do so many things right. The idea of eBay originated from French born Pierre Omidyar, a computer science graduate......

Words: 2598 - Pages: 11

Premium Essay

Analysis of Ebay Inc

...Brochure More information from http://www.researchandmarkets.com/reports/586842/ Analysis of eBay Inc Description: The product Company Analysis is a highly comprehensive research analysis on the particular company and its competitors. A company analysis includes a complete and comprehensive analysis of the selected company, an overview of the industry the company operates in, a PEST Framework Analysis of the industry, and then moves on to analyzing the company itself. Company analysis includes a history of the company chosen, a business segment analysis of the segments that particular company operates through, a look at the organization structure of the company, a geographical operating segments analysis, an analysis of the company’s major competitors. In general, every company profile includes two to three competitors of that company. If the customer is looking for a specific competitor, we can very easily customize the report to meet such a requirement. A financial analysis of the selected organization is also presented in the report which includes a ratio analysis, basic profit and loss analysis, presentation of the company balance sheet, and much more. Any extra request for data on a company can further be incorporated in this profile at no extra charge to our customers. A SWOT Framework Analysis of that company as well as its competitors completes this in-depth product - Company Analysis . Contents: A. Executive Summary B. Looking at the......

Words: 819 - Pages: 4

Premium Essay

Intel Strategy Analysis

...Intel Corporation Strategic Analysis Group-11 Maithilee Deshmukh-123 Siddhesh Hegde-51 Swapnil Wagh-53 Swati Agrawal-54 (PGDM-B) Group-11 CONTENTS 1. History & Introduction 2. Industry Analysis 2.1 Porter’s Five Forces Framework 2.2 Complementors & Strategic Groups 2.3 Life Cycle Analysis 2.4 SWOT Analysis 2.5 PESTEL Analysis 3. Internal Analysis 3.1 Resource Based View Analysis 3.2 VRIO Framework 4. Business Strategy 5. Tetra-Threat Framework 6. Conclusion Porter’s Five Forces Analysis Threat of New Entrants (Low) 1) High Industry Profitability (+) 2) Large fixed costs (-) 3) Economies of scale in research, chip fabrication, consumer marketing etc. (-) The microprocessor market is characterized by short product life cycles, rapid advances in product design, competitive pricing and process technology. This means if firms want to be competitive in the industry they have to invest large amounts of fixed cost to create specialized facilities for production as well as continuously devote large amounts of funds to research and development in order to keep producing top-of-the-line products. Supply side economies of scale give large microprocessor firms advantages in R&D. Since the cost of creating one extra microprocessor is relatively insignificant the larger production size allows R&D costs to be distributed over a larger number of chips. 4) Learning economies &......

Words: 6419 - Pages: 26

download METAL SLUG ATTACK latest apk | 12 Pack Of Clear Eyes Drops Redness Relief 0.2 Oz.6 Ml Exp (2020)Up To 12 Hours | Terra Prime T04