AMD closed at $7.68!!! I think the end is coming near.

[tgboyes1]

Jaguar,

The Dow isn't really the best indication of the stock market in general. AMD is indeed getting hit, but the market is in major turmoil right now. You need to look at what the market has been doing since August to really see what has been going on.

That aside, AMD has been hit harder, but I don't think it's just because of delays, I think alot of people are scared of stock dilution, and debt to equity ratio. Then tack on the errata that AMD ordered to stop ship on Phenoms (which came out after that thread was started) and AMD stock is sliding.

So much more stuff was going on with AMD other than the delays, that I think it was really a combination of many things, and not just one thing.

The market is in major turmoil right now because of the sub-prime problem and all of defaults on mortgage backed securities, which I think is having little effect on AMD. Industrial, Consumer Staples, and most other sectors are rebounding after the Federal interest rate cut. If you really want to use a index that actually has some meaning I would direct you to the S&P as it is considered to be the bellwether by investors. You could just use a ETF like SPDR's (XLK). They typically offer a better view of a sector especially if you want to benchmark a company to its competitors. I am not sure what you mean by stock dilution. They were able to acquire ATI without having to issue extra equity (common stock). Why would they do that now seeing as that is the very last way a corporation would want to raise money? And I think that after a major acquisition like ATI there would be a high D/E ratio. You have to ask though... what is the D/E to the sector and what is it to its competitors. A D/E ratio is useless unless you have historical values to compare it to. AMD had to take on more debt for their acquisition because they use most of their retained earnings (cash and cash equivalents) from previous years to finance research and development. In 2006 they spent over $1.2 billion in R&D expense.

In case anyone was wondering I got most of my values from their 2006 10-K which does not reflect their true financial health as of this date. I could have looked through their 10-Qs for the past three quarters, but I am at work and my lunch break is almost over so I used the quarterly data provided by yahoo.com

Here are two links to the AMD’s SEC filings if you guys want to explore their financials on your own

http://investing.businessweek.com/research/stocks/financials/secfilings.asp?symbol=AMD
and
http://annualreport.amd.com/

 

[caamsa]

Ahhh would you guys look stuff up and just stop pulling stuff out of your A$$e$ all of the time.

If it just meant you could not pay your bills (debt) then a lot of us would be considered bankrupt.

Bankruptcy is a legally declared inability or impairment of ability of an individual or organizations to pay their creditors. Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed. In the majority of cases, however, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the bankrupt individual or organization).

 

[tgboyes1]

Thus my reasoning that to look at AMD in the total view, it is basically bankrupt, though it is not actually bankrupt at this point in time. My sincere desire is that somehow the revised B3 chips get out in a decent timeframe, and that they sell well. But even Hector said at the analyst's meeting that he doesn't expect a profit until Q4 09, and if the total economy of the country continues to be troubled, he may be a bit too optomistic. AMD desperately needs some positive cash flow, as everyone can acknowedge. Whether or not it will get that, no one really knows at this point.

They could always divest ATI... Ha ha

I've heard this as well from some stock analysts, plus a reason that by taking the loss now, they can use it in their 5 year tax averages and thus get decrease their payments from their former, profitable years. In other words, they get a tax refund for those years. Can't say for sure what is the real reason, though.

Taking the loss now would artificailly make the next quarters in 2009 look better, even though in agragate they wouldn't be. That would imply a hope that by looking more profitable than they actually will be, they can attract more investors. It may work, though I don't know for sure.

Companies have tried to do this in the past. It rarely works with institutional investors. It may fool a couple of wanna-be day traders though.

 

[sailer]

Ahhh would you guys look stuff up and just stop pulling stuff out of your A$$e$ all of the time.

If it just meant you could not pay your bills (debt) then a lot of us would be considered bankrupt.

Bankruptcy is a legally declared inability or impairment of ability of an individual or organizations to pay their creditors. Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed. In the majority of cases, however, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the bankrupt individual or organization).

There are several forms of bankruptcy, the most common being Chapters 11 and 13, which by their very numbers imply that there are several others besides these two.

I myself have never been unable to pay my bills, so have never been bankrupt. I further doubt that "a lot of us" implying a lot of the people here, "would be considered bankrupt". As long as a person or company can pay its bills in a timely fashion, then there is no bankruptcy. AMD has been staving off bankruptcy in a variety of ways; refinancing loans, getting investment from an Arab government, and receiving gift like support from the German government among others.

I don't mean to say that AMD will go into bankruptcy court. As its value desends below its debts, that would become a last desperate act for its investors, but it surely is playing close to that possibility in the future.

 

[Ycon]

@ weskurtz:
Ask AMD tomorrow to pay their debts in any possible way. Will they be able to do it? No. So at least by european banks standards AMD would be classified bankrupt.

 

[sailer]

Companies have tried to do this in the past. It rarely works with institutional investors. It may fool a couple of wanna-be day traders though.

Yes, it does rarely work for institutional investors. If, and only if, that is what AMD is attempting, then the idea will most likely fail. Thus my sceptacism. But in no way can I say for sure what AMD is thinking in this.

 

[weskurtz81]

Ycon,

So, any company that has more debt than equity is Bankrupt? Does that apply to consumers as well? In Europe people aren't allowed to borrow money unless they already have the cash to pay for it?

 

[caamsa]

There are several forms of bankruptcy, the most common being Chapters 11 and 13, which by their very numbers imply that there are several others besides these two.

I myself have never been unable to pay my bills, so have never been bankrupt. I further doubt that "a lot of us" implying a lot of the people here, "would be considered bankrupt". As long as a person or company can pay its bills in a timely fashion, then there is no bankruptcy. AMD has been staving off bankruptcy in a variety of ways; refinancing loans, getting investment from an Arab government, and receiving gift like support from the German government among others.

I don't mean to say that AMD will go into bankruptcy court. As its value desends below its debts, that would become a last desperate act for its investors, but it surely is playing close to that possibility in the future.

I agree with you.....110% 😉 My point is that people use the term too loosely.

 

[tgboyes1]

@ weskurtz:
Ask AMD tomorrow to pay their debts in any possible way. Will they be able to do it? No. So at least by european banks standards AMD would be classified bankrupt.

Ha ha... That silly. GM would be bankrupt under those standards... oh wait I think I might need a better example.

 

[MisterChef]

I think the big problem is the downturn in the economy and chip sales aren't going to be as strong in 2008. Intel will be strong enough to weather it while AMD won't be. It's a shame...

 

[sailer]

I think the big problem is the downturn in the economy and chip sales aren't going to be as strong in 2008. Intel will be strong enough to weather it while AMD won't be. It's a shame...

I agree. If the general economy stays bad in 2008, AMD will continue to suffer and may die. At some point, people start making choices over buying food, paying the rent, medical bills, etc, and when that happens, buying a new computer becomes the least of their worries. Its easy to forget that years ago, very few people had computers at all, much less bought new ones every couple years.

A similar thing happened to the car industry back in the 1950's and 60's. Hudson, Packard, Studebaker, and a lot of others died when the markets went bad. Only the strongest survived, and they aren't doing well at all now. AMD could all too easily join the list of companies that got left behind. But I still hope a miracle happens for them.

 

[weskurtz81]

One thing you guys need to consider, the new Asian markets are starting to boom, so not only will exports help float our general economy, but they will likely help AMD and Intel as well.

 

[nameneeded]

Hey, Warren Buffett, want a computer chip company cheap? You can afford it out of petty cash.

Buffett only buys into things he understands. He does not understand computers (from an article I read about the tech bust and whay he didn't invest in tech. 1 Article before the tech bust and the other after.) So no saving from him. 😛

AMD is in a spot of trouble yes. Banrupt? No where near.... yet. The market for tech is volitile as most people who invest in tech are "emotional" investors. They see/ hear of something, see a minor drop etc and panic. they get out of it and thus prices drop. Another type of investor that focuses on tech are high risk investors looking for the next big thing. When they "see" a fall they run.

So lets see what the news has been like lately for AMD/ ATI markets. AMD's new chips have flaws and can't compete with current 65nm Intel chips let alone next generation 45nm chips. "Panic"+ sell= share prices fall. ATi newest cards no match for current nVidia cards with next gen nVidia 2 months away. "Panic"+ sell= share prices fall.

So how does the future look? Bleak right now. AMD got lazy being at the top for so long. (obviously not in market share but they were gaining) Now they are gonna have to work for it. And considering the resources Intel is throwing at R&D it will be hard. One think I belive happened is they grew to fast. With supply deals with computer vendors and ATI aquisition they just weren't ready for the added demands. Its one thing to be considered having the best product out there and quite another to actually be able to share it with EVERYONE. If demand grows by 1000% and your not ready for it you will fail to improve as all your resources go into meeting demand. Its the same reason we have Windows OS and not better options in the mainsteam. A small company just can't send out a better OS with support for millions of users. They need to try to do it 1 step at time. Microsoft can do it 1 million steps at a time so who do you thinks gonna win?

I figure AMD/ATi is going to focus on a market segment (server, mobile etc) for a bit to regain some momentum and market shares/ money then start to expand like they did before. Share prices will be low, they will launch something sweet and our emotional investors will buy shares like no tommorow. This will give them some capital to work with. I also think they will sell off ATi within the next 2 years.

Just like I'm waiting for it to hit under $5 before I buy.

IMO anyways 😀

 

[nameneeded]

@ weskurtz:
Ask AMD tomorrow to pay their debts in any possible way. Will they be able to do it? No. So at least by european banks standards AMD would be classified bankrupt.

Ask the US goverment the same. Yet there they still are. As are alot of goverments.

Banckruptcy is not about not being able to pay of their creditors. Its about about NEVER being able to pay their creditors and their operation costs etc. Bankruptcy has many levels. One of which is the ability to go into bankruptcy protection to stop creditors from comming after you for money. This is to give one time to gather resources/ money etc and make deals (repay $0.50 on the dollar etc) and save themselves.

There are cases of goverments basically giving a company welfare money to keep it going as well. Like here in Canada we have a huge company that the goverment has been giving money to for years.

 

[roadrunner197069]

I wish I could win the lottery, I would but it all. They screwed up, but they will be back with a vengence. If they are smart and get back on top they need to keep prices way low so everyone will go back to them. What hurt the most was Intels price srtagedy.

Most likely though if they get on top they will price gouge and still have trouble.

 

[leo2kp]

I'm going to wait for it to be one of them penny stocks and throw $500 in to it 😉

 

[Kari]

Furthermore, if AMD is still around in 6 or 8 months time, they will be in a world of hurt when Intel release Nehalem.
According to early reports from intel, nehalem will have a performance gain over C2D larger than C2D was over the old netburst architecture.

What makes you think Intel will release nehalem as planned. They are allready delaying the mainstream penryn quads because amd doesn't have competing product.
IF (big if) amd goes down I'd bet Intel will cut down on R&D and just keep making those penryns untill someone else comes along and takes the lead away from them

 

[nameneeded]

What makes you think Intel will release nehalem as planned. They are allready delaying the mainstream penryn quads because amd doesn't have competing product.
IF (big if) amd goes down I'd bet Intel will cut down on R&D and just keep making those penryns untill someone else comes along and takes the lead away from them

They will release it as planned. They have to otherwise the money they spent on developing it will be wasted. Also it was sitting on thier laurels that got them in trouble with AMD and now it has put AMD in thier current position.

The smart thing for them to do is maintain thier current marketing plan and keep on releasing new products. This gives them a lead in market placement. Also since the release of faster and newer products lowers the price of previous versions this will make it harder for AMD to release anything at a competative price.

For example; Lets say that when the 45nm's come out the QX serise suddenly drops to the price point of most Core2's. Now not only does AMD need to present a product that is at least superior to Core2's (which still hasn't happened) it has to be competative with the QX stuff. And then they are force to keep the price down to remain competitive thus limiting their profit margin and revenues to keep producing new products.

Thats why I believe to survive they will have to start to focus on specific markets (server, mobile etc) to get
re-established and earn back some consumer confidence.

That my take anyways.