GlobalFoundries recently had their capital markets date, so we want to share our take on it. While the sell-side bankers are incredibly bullish, and the stock has gone up 20% over this week, we want to share our bearish view. We have even owned and recommended GlobalFoundries, but we are now a seller. As a side note, we have written extensively about them in the past, including capacity, expansion, and technology. We have said they are leading edge in specialty technologies, and in particular, we have praised their RF-SOI and silicon photonics “Fotonix” offerings. Our content was even included as a slide in the CTO’s capital markets day presentation this week.
Today we want to talk about how they are stuffing their customers with inventory, why their long-term commitments aren’t as rosy as they proclaim, why the geopolitical valuation argument holds very little water, and why we are negative on the firm’s stock.