Mobileye’s stock melts down as inventory issues prompt grim revenue warning

[blueone]

My guess is that it will first come from a German automotive company and it will be implemented in silicon not resistant software patches.

That will really surprise me. I'm totally unimpressed with the vehicle management systems in our 2022 Porsche, especially the electric power brake booster with a high elevation / cold temperature problem that throws a CEL that Porsche still hasn't worked out a solution for in two years. It is difficult to imagine them getting the design of a quantum crypto chip right. Oh I forgot, and the proximity sensors have an occasional glitch too where you're warned you're about to hit an obstacle when there isn't one, always at a stop sign. No fix for that either. Not confidence inspiring.

 

[Daniel Nenni]

That will really surprise me. I'm totally unimpressed with the vehicle management systems in our 2022 Porsche, especially the electric power brake booster with a high elevation / cold temperature problem that throws a CEL that Porsche still hasn't worked out a solution for in two years. It is difficult to imagine them getting the design of a quantum crypto chip right. Oh I forgot, and the proximity sensors have an occasional glitch too where you're warned you're about to hit an obstacle when there isn't one, always at a stop sign. No fix for that either. Not confidence inspiring.

I was thinking MBZ, I know some people.... My nephew works at a Porsche dealer so I hear similar stories. He learned to drive in my Porsche Cabriolet (PDK) and can't get enough of them. He wants me to buy a new GT3, not going to happen. I no longer enjoy Porsche driving in Northern CA. I put .5M miles on my Porsche 911s and enjoyed every minute of it. Today the roads are bad. The drivers are bad. The traffic is bad. It is only going to get worse so working at home and sailing on the weekends is where I am at.

 

[count]

Just to clarify, the statement Mobileye made was not an earnings release, it was a warning. Also, this looks like a classic case of a manufacturing company thinking higher customer inventories were the new normal, and it was apparently just a transitory policy, and it's almost certain not every customer acted in concert, so it probably took some number of months for the tidal wave of order cuts to build.

As for the conspiracy theories of "financial engineering", I've seen that question come up before in start-ups, but you don't see it in a US publicly listed company. (In fact, some US-listed Chinese and Hong Kong companies got in trouble with the US PCOAB over audit deficiencies last year.) Mobileye is an Israeli company, but since they're listed on NASDAQ they're subject to the very strict rules and potential penalties of the US Securities and Exchange Commission. And no major US audit firm is going to sign off on that sort of hanky-panky either. So I'm thinking the most likely scenario is this was just a case of wrongly thinking the new normal of high customer inventory levels, as opposed to just-in-time deliveries, would last a lot longer than it did.

There are lots of legal ways to do financial engineering, and a strong incentive to massage the numbers ahead of an IPO. As for the IPO being over a year ago, that's exactly when you'd expect to see the numbers start to normalize. It's not like you would IPO then immediately tank the earnings after going public. Your underwriters would get really pissed off if you did that, you wait until after lock up period.