Mark Holder
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The Problem With Mobileye

Mobileye (MBLY) has a high valuation multiple and spends very little on research and development. The problem with this scenario is that it creates competitive pressures and customer desires to cut grab some of those profits. See more details here

The big news from last night was the statement from Elon Musk on the end of the partnership with Tesla Motors (TSLA) via Electrek. The following sentence highlights the issue with the limited R&D budget from Mobileye.

Mobileye's ability to evolve its technology is unfortunately negatively affected by having to support hundreds of models from legacy auto companies, resulting in a very high engineering drag coefficient. 

Do you really want to pay a premium for a company that won't be the technology leader in the sector? 

Disclosure: No position