Less than the $5.7 billion Yahoo! paid in 1999 for Mark Cuban's Broadcast.com: http://money.cnn.com/1999/04/01/deals/yahoo/
Times -- and fortunes -- change.
Times -- and fortunes -- change.
In April 1999, Yahoo! acquired the company for $5.7 billion
(or over $10,000 per user) in stock. [...] The company had 570,000 users.
-- Wikipedia
Are there Yahoo! investors who have lost money? Sure. That is true for every stock that is traded. Are their investors that made money? Sure, same deal.
If one wanted to evaluate the performance of Yahoo! management in 1999 then one way to approach it would be to answer the question, "Given what Yahoo! knew at the time of the acquisition, what would have been a better use for that stock?" I personally can't imagine what that would have been.
If the company knew thought its stock was 10x overvalued (Yahoo's stock did drop 90% a year or so later) then they really only sold it for $570 million. That is, if Yahoo knew its stock would be worth 1/10 of its current value in a year, buying a company with $5.7B in stock will add value to Yahoo so long as The acquired company ends up being worth >$570M.
That being said, if they knew their stock was overvalued, it would be best to issue additonal shares, as $1 is worth $1 regardless. Similiar to how undervalued companies should buy back their stock.
These were the heady days before the dot-com bubble burst. In April of '99, Pets.com had just IPO'd (February) and Webvan was a going concern. The 'information highway' replacing traditional radio was believable enough. I don't think at the time anyone knew it was a waste. Hindsight is 20/20.
Offtopic: Only today did I put 2 and 2 together on the inspiration for Silicon Valley's Russ Hanneman "I put radio on the internet" joke...
http://shop.markcuban.com/three-commas-universal-symbol-for-...
Mark was smart and bought puts to protect his stake and then sold it so that he wasn't tied to Yahoo. In retrospect he was really smart.
Also questionably legal. There's this little thing called SEC Rule 144 [0], which forbids this kind of action (attempting to preempt pump-and-dump IPOs and mergers). I have no knowledge of the specific details involved, but I find it unlikely that Cuban was not subject to Rule 144 - especially since you say "bought puts to protect his stake", which indicates he couldn't sell Yahoo shares at the time, and thus was almost surely subject to said rule.
SEC enforcement was a joke (and possibly still is), but illegal actions are only ever smart in retrospect, post "statute of limitations".
http://investmentxyz.blogspot.fi/2006/05/cubans-collar-anato...
I'm not familiar enough with the SEC rules to add anything to your comment, other than it's the first time I hear this and it's.. interesting?
No action or inquiry from the SEC is a bet that a lot of people are willing to take, and it pays well for most of them. So does lying to the IRS. Personally, I prefer to pay more taxes, and lose some income (I wanted to protect a 5X exit from downside using puts, and my tax/legal guy warned me against it and introduced me to 144. I ended up with a 1.1X return - I've lost 98% of the profit because the buyer's shares dropped 5 months after the purchase for a reason unrelated to the 5X exit I was a part of. Sums weren't life changing either way, in case you wonder).
"What does the #2 CPU maker need to become #1? The #2 GPU maker, obviously!"
Instead they entered both the integrated and discrete GPU markets, when they were already a market underdog that already struggled in the CPU market. They paid way too much for ATI, and then spread themselves way too thin.
I'm not just pointing out the error in hindsight, I was a critic of this deal back when it was first announced as well.
That's not true. The PC enthusiast market is a small segment of the overall PC market, and that's not even counting mobiles. Lots of people play non-graphically-intensive games.
More importantly, GPUs are hugely important for things that aren't games. Honestly, the fact that video needs hardware acceleration (which is part of the media/GPU block) means that there's a reasonable argument that games aren't even the most important practical function of a GPU.
Having an APU allows them to play in the low end market which was dominated by Intel with their IGP, the vast majority of laptops do not come with a discrete GPU which meant that AMD could not compete with Intel at all prior to their acquisition of ATI unless they would develop their own GPU or license it from some one (they had plans of licensing PowerVR at some point IIRC).
It's not a massive money maker for them, but I think that it positioned them well to push open standards like FreeSync, and Mantle/Vulcan. AMD is also fighting back by trying to develop open standards, knowing that proprietary ones wouldn't ever get any traction.
Not unless AMD had a dominant market position. CUDA dominating the ecosystem right now is a major PITA, and so is the insistence on GSync over FreeSync.
On the business technology side it'd be even harder due to thermal characteristics that have been demanded for over a decade now and Intel destroys AMD there without question.
MS and Intel both put EXTREME pressure and incentives on OEM (and both were accused of Anti-Trust Violations) to keep their defacto monopolies
Oddly enough NVIDIA back in the day made what arguable was the best chipset for AMD CPU's - NVIDIA nForce.
What happened was that Intel got its game back and then both, Intel and AMD, missed the mobile train. On the ATI side, they were outcompeted by Nvidia. Bad luck, and bad strategy.
Some investments work out. Others don't.