ATI in big trouble??

[ALobpreis]

I didn't find this posted around, so I'm posting it now.

ATI stand accused of insider trading, lying and conduct contrary to public interest. The long list of charges been made against ATI is very shocking and could cost the company more than they expected.

This could have an extremely damaging effect on ATi as a company as well as damaging to employees and shareholders if the company stock tanks. The effect a negative outcome in this matter could have a huge impact on the industry as a whole.

:eek: :eek: :eek: :eek:

Source (http://www.osc.gov.on.ca/en/Enforcement/Allegations/2003/soa_20030116_ati.htm).

[jbirney]

Just like NV had people that did the same thing last year....

[ricercar]

This is exaggerated. Laughably so.

Consider that NVIDIA had a SEC investigation last year. 10 employees & 5 non-employees traded NVDA based on the Microsoft XBox deal before it was public. NVDA stock tanked and the perpetrators went to jail. Even for the then-unchallenged king of graphics, the graphics "industry" ignored the criminal activity. Only the SEC and Wall Street reacted.

To say ATI can damage the industry is a claim that ATI has power which ATI simply does not have.

[CainSyris]

The difference is this is the CEO and founder of ATI and his wife who are accused. The ramifications are immense if true because it will be like stabbing a knife right through the heart of a company supposedly holier than nVidia. Of course, most sane people know companies are in this for the money, but there are those ATi fanatics who believe ATi is a divine savior against an evil and growing nVidia.

So now we see that the beating heart of ATI is nothing but a moneygrubbing cheat.

If you believed a company you put stock into was being run by someone who cheated *you* while he saved his own stock by *selling* his company's stock to make money and left you high and dry, I do not think that *you* would keep your money in that company. Let me reiterate. He runs a company in whom he finds out he can have no confidance in and so sells his stock rather than 1) stand by his company's losses that he led them to and 2) uses that knowledge to sell to other unsuspecting stockholders who will then have devalued stock that they could not possibly have known about yet ATI's CEO could have. That is a cheat. Now who wants to put stock into a company who is run like *that*? This will really hurt customer and stockholder confidance if what they say about the *CEO and founder* of ATI is true.

It wouldn't be so bad if it was just some employees. But this is ATI's leader. Now *that* is why its so bad. I think more sites should elaborate this so that people ignorant of who is being charged here will understand better.

Of course, the CEO was stupid to try and sell those stocks under his wife's name and expect not to get caught. This makes nVidia's employee-stock problems look like small potatoes.

[Lezmaka]

I wouldn't say ATI is in big trouble, but they may be looking for a new CEO in a while.

hmmm, CEO's name is K.Y. Ho. Looks like if he ends up going to jail, he's gonna be someones Ho and is gonna beg for some K.Y.

[CainSyris]

http://www.xbitlabs.com/news/story.html?id=1043345917


There's a little more perspective.

[ricercar]

If you believed a company you put stock into was being run by someone who cheated *you

Ho didn't cheat _me_ out of anything. Ho broke a law, but his crime was not against my person. The part that's laughable is to believe either Ho or his crime have the power to affect the entire graphics industry.

Ho's crime in no way changes the performance of my Radeon card or make me unlikely to buy another tomorrow. Ho's crime doesn't mean next generation Radeons will perform any differently than they would have without his crime.

The argument is on firmer ground with the stock thing, but Ho's crime won't put ATI out of business and Ho cheated the ATI stockholder only indirectly. His sale didn't cheat any stockholder out of money. However, as CEO, by getting caught in a crime, he failed at his feduciary responsibility of running the business as well as possible to make the stock price rise. As an ATI stockholder I can say he failed to perform, but not that he cheated me out of cash. The ATYT sharholder can form a class action lawsuit, but the man didn't cheat me. When ATYT share price plummets during the trial, Ho still didn't cheat me. It's the fickle short term investor who cheats me by selling lower, selling ATYT because of a headline.

The strongest "cheat" argument would be if I was an ATI employee, because Ho's crime then jeopardizes my job, and therefore income, and therefore survival. I would be cheated out of my current lifestyle. However, putting ATI's personnel on unemployment still doesn't damage the graphics industry.

If ATI goes out of business, I'll buy a Parahelion or Geforce card. ATI's death won't kill the graphics industry for consumers. If ATI is not a good investment, I'll move my capital to another investment, likely a competing graphics vendor who will pick up the marketshare. And if all ATI employees are fired and leave graphics jobs forever, there'd still be good talent producting cards for other companies.

I have no argument that a CEO is more prominant than a Marketing Director, but the rest of the argument doesn't work for me. Ho's crime simply doesn't have the power to "damage" the entire graphics industry. No single personality, no individual white collar crime can damage the entire graphics industry.

Ho's crime is trivial, and cannot be compared to the damage done by Enron or Worldcom executives, who--while damaging hundreds of thousands of investors' lives---still did not damage their respective industries.

[CainSyris]

I agree that the loss of ATI will not hurt the industry. I never disputed the irrelevency of that. I do think that it could hurt ATI. That is all I have argued from the beginning.

As for Mr. Moneygrubbing CEO not hurting a stockholder, well that's only partially true. You see to *sell* those stocks (and be guilty) he actually had to sell them to someone. One person sees those stocks at 16 dollars for instance and says, "Good investment. Not really fluctuating" and they see a lot of them for sale. He sells them easily and the next day they drop.

That is how he is cheating the stockholders and if he is willing to do that with his own company, then really how much confidance can you have in him not to cut and run at any given moment? He's already proved he's willing to sell stock off his own company to make money.

It only hurts the consumer by proving where his concerns lie (in money, which is not a bad thing to me but a fact that is glossed over often for ATI), could result in their stock collapsing thereby reducing the company's ability to compete with nVidia in the longterm, and reducing the amount of support that is given to its products (as it will have less money and thus less resources to put into product support like drivers). So I suppose the way it hurts the consumer who has already bought ATI products is indirect. The way it hurts the customer who might buy ATI products is if ATI's ability to produce cards is hit because of a stock price reduction and that will come if confidance drops too low.

This coming on the eve of GeforceFX launching and possibly having higher performance might hit the stocks hard for ATI, even though we know that ATI has a broader, better ranging product range atm (R9000 for budget, R9500 for 200 dollar, R9700 for 300 dollar, and R9700 pro for above 300) than nV.

But in no way am I arguing this could have ramifications against the entire industry. I suppose some think that ATI is nVidia's only competition and that prices will rise and products will come slower without ATI. These people should see that nVidia cards are on the eve of coming only more slowly now and the 256 meg cards will probably be more expensive. So... the future is now? ;) And that's with ATI as competition, so perhaps it would have less effect than they think to be without ATI.

[SurfMonkey]

The bit that gets me is that this all came about because K.Y Ho realised that nVidia were going to outperform them during that fiscal year and basically bet against his own team. When the CEO of the company decides their nearest rival is a better bet, then I would think that's time to get worried about the future.

[Kruno]

Let me ask about "insider trading".
Someone that works for the company buys shares before something massive is announced. When share prices rise, the person sells the shares for more and earns money.

Is this right? In what way is this cheating or breaking the law?
I am confused with all these business ethics. :(

Thanks

[SurfMonkey]

I think it basically works out that you as the insider know something about the companies position that will affect its fiscal performance that isn't public knowledge.

This way you can benefit from repositioning your stock or whatever so that you can benefit from the outcome.

I think in this case K.Y. Ho knew, before any other stock holders, that fiscal performance would be down as nVidia revenues grew and that ATi share prices would dip as a result. So he and his compadres basically went offshore to buy the stock cheap and sell on the recovery. He also donated a lot of shares to charity to write off against tax because he had inside info on returns.

I think that's about it, the commission document that is linked to above looks pretty nasty for ATi. This could do some real investor damage to their stock. And no investor confidence, no more R&D budget. Hopefully they have someone in place to step in and take over prettty rapidly.

[Steppy]

Um, it's not like this is new news, this was talked about MONTHS ago(maybe even up to a year ago).

[John Reynolds]

Originally posted by CainSyris
So now we see that the beating heart of ATI is nothing but a moneygrubbing cheat.

This is so dramatically over the top in its tone that I can't help but come to the conclusion that you're an Nvidia fanboy. Which means the motivation behind your so-called opinions is questionable. Which means anyone with a 3-digit IQ will just flat-out ignore you (which I will after this flame <g>).

[Kruno]

So now we see that the beating heart of ATI is nothing but a moneygrubbing cheat.

Uhm... every business man and women wants to make money. Some just go too far. It doesn't take an Einstein to figure out that there are greedy people in the business sector. :rolleyes:

[MrNasty]

Who cares. ATIs cards are still the best value for money in the mid to high range.

Besides nvidia probably does the same.

[Mono]

What, CEO trying to screw money out of a company?!?! That's a first! :p

[StealthHawk]

due to the nature of the stock market, problems arise when you get caught ;)