AMD asks to double common stock to 1.5 billion shares

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Could you give a link. Not long ago, I read about insider buying at AMD, and the Yahoo info bears this out. The normal exercise and disposition of options are part of how executives make a living now of course. If you know of something unusual, please offer a link.

edit: WSJ tables AMD doesn't show up on the active insider list (which isn't long though). Noticibly Microsoft does have a lot of insider selling, but again, you'd have to know the norm, since it's actually a method of payment to employees.
 
you are only figureing in part of it though. They are to small to expand in every direction at once, they cant support that amount of growth, and yet, that is what they are trying to do, and look where it has gotten them? No cash on hand, more debt then they are worth, and a brand name that is worth more, broken up and sold seperatly then togethor. This, to me, doesnt seem like a company on the move, it sems like a company sinking fast
 
that seems a little overblown. It is very much to the disadvantage of HP, Dell, Lenovo, etc., for AMD not to thrive. Without AMD, Intel could take a nice chunk of the profits away from the OEMs, both in margins and ultimately sales. Right now, the OEMs are benefiting enormously from AMD, and they realize it I'm sure.
 
often, company leaders will sale some of their stock, back to the company,at current market value, for the company to use as it sees fit, includeing as leverage. Leverage is when a company owns enough of its own stock, that no one can buy them out, although AMD doesnt own that much of its stock, if it does double its comon stock, and nows owns the 3% that it bought from its leaders,then it will own around 57% of itself, enough to defeat any takeover attempt
 
Could you give a link. Not long ago, I read about insider buying at AMD, and the Yahoo info bears this out. The normal exercise and disposition of options are part of how executives make a living now of course. If you know of something unusual, please offer a link.

edit: WSJ tables AMD doesn't show up on the active insider list (which isn't long though). Noticibly Microsoft does have a lot of insider selling, but again, you'd have to know the norm, since it's actually a method of payment to employees.
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At the bottom of the link to the Inq at the beginning of this thread, it lists how many shares the various officers have been selling. I understand that buying or selling shares is part of where executives make their money, but I've long made the contention that their activities should be barred from their own company because of their priviledged information. If the AMD exec's have only sold a few shares, then there may be no problem, considering the total amounts they own. But if there is a pattern in their selling, in this case, it means that they are using their priviledged information to bail out before the public has such information. That is illegal and people go to jail for doing such things.

Vern,

I've already put a call to my broker. This has caught him by surprise. His advice is to hold for the moment. He hopes that the news is being mistated. I'm also waiting for a call from my son. He does a fair amount of accounting work and is heavy into the legal ends. One of the people he works with is from the IRS and that guy did a lot of the investigating on the Enron case and a couple other accounting scandels which resulted in long jail sentences for the people involved. If it starts looking too bad, my sell order will go in today, not Monday morning. I'll eat a 30% loss, but that's better than 60% or if the worst happens, 100%.
 
wow, this has been blown out of proportion bigtime. AMD, nor its exexcutives, have done anything illegal, they are hurting the company through stupidity, but that isnt illegal. :trophy:
All of this, could simply be a means for AMD to stop any chance of a takeover, giveing the company more then 50% of total ownership now, while it hurts the image, will save the company later if someone, nvidia, is planing to try to buy them out. On the bright side, if Nvidia does buy em out, my shares in thqat company will go up!
 
Only reason to sell is either because you don't have a choice, or because you honestly believe the company won't thrive within your time horizon for how long you can be invested.

For myself, if I didn't have so many other great stocks, I'd surely have a higher portion of AMD, and when I rebalance next, I'll likely indeed buy some more.

But I'm starting here at only 1% of my portfolio, and it's not much risk, see?

Diversifying allows you to ride out the ups and downs without losing sleep. If AMD goes way down more, and the market in general gains 5%, I'll likely gain about 5%. If the market loses 5%, I'll lose close to that *temporarily*, because what matters for my stocks is the very long term outcome, like 15 years or more when I need some of the money.
 
often, company leaders will sale some of their stock, back to the company,at current market value, for the company to use as it sees fit, includeing as leverage. Leverage is when a company owns enough of its own stock, that no one can buy them out, although AMD doesnt own that much of its stock, if it does double its comon stock, and nows owns the 3% that it bought from its leaders,then it will own around 57% of itself, enough to defeat any takeover attempt
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I understand what leverage is and how it can be used, but to do it in the manner that you suggest would be illegal. It would similar to conterfeiting, by printing up a lot of shares that either have no value in themselves or decrease the value of the stock held by the shareholders. True leverage is when, for example, a company has issued stock at a given valuation and it retains control of 51% of the shares. To simply try to get the 51% without compensation to the shareholders so their ownership value remains unchanged, as in a stock split, amounts to theft from the present shareholders. The courts typically look at such things in a highly unfriendly manner.

Since the SEC said that this split has to be approved by the shareholders, I can't imagine that the major holders (such as mutual funds) would voluntarily give up half their investment, nor would they desire to face their own stockholders if they did such a thing.

Looking at the third paragraph in the Inq which describes the stock sale as "in the best interests of the stockholders", it makes me wonder if the heads of AMD have gotten so used to lying that they actually believe their own lies. There is no way that a stock sale such as this could be in the best interests of the stockholders if it is anything except a stock split.
 
im not saying its right, but if the shareholders vote for it, then they are willingly giveing up money to make AMD money,or give AMD a safety net. It is only illegal if they did it without investor apporval, the government cant punish people for giveing money away to support a company
 
wow, the level of ignorance displayed on the subject of finance is amazing... :roll:

i was going to make a long post to correct a lot of misunderstandings, but lance525's post was excellent. GO BACK AND READ IT.

those of you claiming that this will dillute shares by half or cause harm to shareholders in order to benefit management are demonstrating your complete lack of knowledge...

cut eps in half because of unissued shares? the tech equivalent would be saying that you expect your HL2 fps to double because you increased your ram from 1 to 2gb. slly, yes? and expecting an eps cut in half looks just as silly to those of us who know finance...

in theory, the actual issuance has ZERO impact on the company
in real world in has some effect, because it signals the market that amd may have some future cash flow problems and therefore could cause a drop in stock price. (on the other hand, one could argue that th e market is already very aware of amd's potential cash problems)


jackxlj - please stop talking... you don't know what your talking about.
1) your post about takeover protection shows a clear misunderstanding as to the difference between unissued shares and treasury stock
2) your definition of "leverage" is incorrect
3) you said that amd has "more debt then they are worth" and that they need to "come close to paying off the diffrent loans they took out."
- both those statments are completly untrue. AMD has less debt than market capitalization and they are not in default on any loans
- you need to be more careful with what you say about a company and their creditors. your false statments about that could constitute libel. i doubt anyone will sue you over it 😀 but still, you houldn't say things like that unless you know it

-tiger
 
im not saying its right, but if the shareholders vote for it, then they are willingly giveing up money to make AMD money,or give AMD a safety net. It is only illegal if they did it without investor apporval, the government cant punish people for giveing money away to support a company
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1) it is not necessarily the current investors who will be giving amd cash
2) thy get stock in return - its called an INVESTMENT
3) illegal??? wtf, its a business decision.

everytime you talk, jackxlj, people get dumber. please stop.
 
This is not a stock split --- stock splits are good news as they are signs that a company expects to perform better over the long term. This is asking the shareholders to lower the equity value of the existing stock so AMD can sell more of itself as a means to raise much needed capital this is done because one is running out of money.

Usually, if a company is doing badly they issue more stock to raise operating cash.... this is exactly what AMD is doing.

Monday, close of the stock market, AMD will be down in the 13 range, maybe less.... the market is going to take this a bad sign.
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I think this is more of a neutral move, I believe they see an opportunity but don't have the cash on hand to jump on it.

Risk is risk no matter how you slice it, they are the king at losing money for years on end and sticking around. You also have to remember that semiconductors are a boom to bust type stock and particularly one of the most riskiest investments one can make.

You are correct in saying that a stock split is good news a reverse stock split is usually meant to raise stock price to prevent delisting which is really bad news.

Neutral is issuing more stock to get some cash. This can very well turn into good or bad news depending on how they put that cash to work. As I said above risk is risk and OPPORTUNITY only comes around so often.

By AMD doing this I think is more of a good sign than bad, but the semi market is a tough one, time will tell.
 
This doesnt make it easier for AMD to be taken over,unless they plan on breaking AMD up and saleing them off, becouse what this does, is make the diffrent parts od AMD more valueable then the sum of them all togethor.
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Exactly. I don´t expect that they want to be taken over. Maybe they created the rumor of the takeover to increase the value of the new shares.
 
Could this move just be a precursor to a rights issue? This will have the affect of diluting the value of your current AMD stock, but if you see an upside to the stock price it also allows you to buy new shares at a discount to the market price. If the rights issue price is struck at a good price point it may be just what AMD need. i.e. access to a new source of funds at low cost.

If this is the case it does suggest they are over-stretched, but in a way it could be perceived as an after the event rights issue to cover the cost of the ATI acquisition, amongst other things. The fact that it is ‘after the event’ suggests that their financial planning department needs to polish their crystal ball a bit more thoroughly. I assume that the markets will punish them for this and any rights issue will need to be more heavily discounted because of this sloppiness.
It’s very common for companies to issue new paper (stocks, bonds etc) when they buy other companies, so it doesn’t have to be seen as a disaster.
The problem is that if Intel can turn the screw on AMD this rights issue, if that’s what it is, will end up being more of a bail out than asking for funds to pay for acquisitions and expansion. Which brings us to the issue of timing. If Barcelona is hot then make the rights issue call after they’ve proved that it is. If it’s not then make the call ASAP. Should be interesting to see this one play out.
 
you are so off,never once did i say they were in default on any loans. Also you are grosly wrong about what the doubleing of common shares will do to the companys outstanding stock.
http://www.findarticles.com/p/articles/mi_m0EIN/is_2006_July_24/ai_n16548322, this is a financial look at AMDs debt,placeing AMDs debt at 3.2 billion.
http://finance.yahoo.com/q/ks?s=AMD
this is amds current finanaces.
Se anything funny here? They had a negative profit margin, and a negitive return of equity. That is why I said they ned to pay off the loans,becouse it is hurting their bottom line as long as they have to pay them.
On to other things, total stock, equals an amount of ownership in said company, doubleing the stock, will lower said value by half, as you will own a small part of said company. I can do an apples in peices to make it easy for you
 
wow, this has been blown out of proportion bigtime. AMD, nor its exexcutives, have done anything illegal, they are hurting the company through stupidity, but that isnt illegal. :trophy:
All of this, could simply be a means for AMD to stop any chance of a takeover, giveing the company more then 50% of total ownership now, while it hurts the image, will save the company later if someone, nvidia, is planing to try to buy them out. On the bright side, if Nvidia does buy em out, my shares in thqat company will go up!
Click to expand...

Part of the problem here is the lack of information. It doesn't help that the AMD execs filed this on a weekend, rather then on Monday. That at least implies that they may have been trying to do something illegal. The fact that they were selling off a lot of their personal shares at the same time hints at insider trading, which would be illegal if it can be shown that they knew there was trouble and they were getting out while the getting was good.

In addition, the wording they used in justifying the move is suspitious at best. By specifically bringing up the idea of issuing stock for anti-takeover purposes, the implication stands that such really is the case. Add to that the fact that the execs are selling off thousands of shares with options to buy back at $0 dollars, and it looks bad indeed. I won't say that anything illegal has been done or was intended, but for sure it was stupid. And for sure, it can't do anything good for the market share price.

Halbhh I have choices whether to sell or hold. The main questions in my mind are the timeframe involved and what this is going to do to the actual value of the stocks. In total of my portfolio, I can stand the loss, but at the same time, I hate to loose money if I don't have to.
 
its always a tossup, if it works or not. Hindsight makes everything wrong. If k10 and r600 demolish the competition, then this will be seen as genius, if they tank, it will be seen as the prelude to the end of the current board of directors...such a fine line to walk
 
you are so off,never once did i say they were in default on any loans. Also you are grosly wrong about what the doubleing of common shares will do to the companys outstanding stock.
http://www.findarticles.com/p/articles/mi_m0EIN/is_2006_July_24/ai_n16548322, this is a financial look at AMDs debt,placeing AMDs debt at 3.2 billion.
http://finance.yahoo.com/q/ks?s=AMD
this is amds current finanaces.
Se anything funny here? They had a negative profit margin, and a negitive return of equity. That is why I said they ned to pay off the loans,becouse it is hurting their bottom line as long as they have to pay them.
On to other things, total stock, equals an amount of ownership in said company, doubleing the stock, will lower said value by half, as you will own a small part of said company. I can do an apples in peices to make it easy for you
Click to expand...

you're an embarrasment to yourself. Doubling unissued shares does absolutely nothing to th value of the stock or the price per share. these are unissued, not outstanding. you could raise the number of unissued shares by a trillion, it would make no difference to the value or anything else.

you could say that interest on loans negatively effects every company's bottom line... you don't have a clue about capital structure.

frankly, jackxlj, you're one of those people who knows just enough to be dangerous - but once again by opening your mouth you just show how ignorant you are.

You're going to break down the apple into pieces for me???!!! 😀 :roll: 😀 :roll:
hahahaha

to sum it up, unissued, oustanding and treasury shares are all different. take some time to educate yourself before you speak

ps. yes, amd has debt of about 3.2 billion and a market cap of about 8 billion, thus your statrment that they have more debt than they are worth was (as i pointed out) completely incorrect.
 
but you are only looking at debt and total worth, you have to add in the rest, such as the fact, that they are loseing equity and money, thus debt increases and worth decreases. On a side, by itself, thedoubleing of unisued shares does nothing, as long as they never act on it. But I doubt they will get approval to issue them, and then not put them on the market, to raise cash, and even if they dont, investor confidence will plunge even further. Shall we bet on wether AMD closes in single didgets on monday?
 
Why do you insist on the nVidia-AMD buyout?
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Agreed. A massive pain for Nvidia due to ATi.

IBM buying AMD? Anyone ever heard of Lenevo?

Oh yes, ATi also make the Wii GPU, and we all know how well that is selling 😛
 
you're an embarrasment to yourself. Doubling unissued shares does absolutely nothing to th value of the stock or the price per share. these are unissued, not outstanding. you could raise the number of unissued shares by a trillion, it would make no difference to the value or anything else.
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Doubling the shares, unissued or otherwise, does nothing to the value of the stock? I think you need to go back and study math again. Doubling the number of shares halves the value of the per share. The company is only worth a given amount of money. An amount of shares are issued based upon that value. If the share number is increased, the per share valuation is decreased in like percentage unless the company does something to increase its value in like percentage.
 
I dont insist on the nvidia buyout of AMD,its just my favorite theory,giveing everything. Even if Nvidia doesnt sale off the ati brand, they wont be monopoly becouse of Via,Sis,and Intel. They would only around 30% of the gpu market,hardly a monopoly. Also, they have been looking for a chance to make x86 cpus, but dont have the liscence, if they bought AMD,they would...even better, if they bought AMD, then they could sale ATI, and make a good portion of the cost of buying AMD back instantly. They have a high credit rateing, absurdly low debt, and very nice income. They also have a ceo who is hungry to expand, and aboard of directors that backs him 100%, and investors who are totaly behind them. AMD is at a low point, stock a shadow of its normal self, and who wouldnt spend 9 billion once if they had the chance to make 4 billion off of it a year?
 
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