AMD Stock Plummets 25% in Response to K10 Release - Investors Scared

[pip_seeker]

Meanwhile AMD has 4 buy recommendations...

http://finance.yahoo.com/q/ao?s=AMD

As does Intel....

http://finance.yahoo.com/q/ao?s=INTC


Intel has a target price of $30, AMD has a target price of $14 - $15.


So what is the point in all of this??? not much other than fanboi spew. :lol:

 

[MarkG]

Look at Citigroup, the biggest bank in the world. One month ago at $42, yesterday at $30, 5 year-low. AMD certainly disappointed, but its stock price is also hit by factors that aren't their fault.

I didn't realise that AMD had been selling sub-prime mortgages as a sideline; no wonder they're in trouble!

Hint: Citigroup wasn't hit by 'the market', but by the news that it's going to have to write off billions of dollars that it lent to people who couldn't afford to pay it back, so they could buy overpriced houses; news so bad that their CEO had to resign.

Here, for example:

http://www.bloomberg.com/apps/news?pid=20601039&sid=atmcXt12n470&refer=home

 

[spoonboy]

Not Phenom, K10, which includes Barcelona on the server side.

You still can't say "IT'S THE STOCK MARKET". If AMD declined with the stock market it would have gone down 5%, just like Intel did. But no, AMD stock has tanked 25% in the last month. I won't pretend like the entire decline is a response to K10, but I would suspect that a good part of it is, especially the last week.

AMD is going to be in trouble, they keep desperately searching for cash because they're not making any.

You and the majority of others here are missing the point. Namely global stock market uncertainty caused by the world's debt markets. The market is very nervous and AMD has alot of debt, which in AMD's case might aswell mean having a big sign hung around its neck saying 'Avoid'. Any company with alot of debt relative to its market cap. is going to find investor confidence hard to come by, as doubts over the availability of fresh debt at less than punitive rates slowly increase.

However, AMD has cash on hand to the tune of somewhere about 1.8 - 2 billion dollars, after the recent investment made into it is taken into account, making its demise inside of the next 9, even 12 months look very unlikely. Furthermore, even before the launch of 'Phenom' and the new '3850' & '3870' line of GPUs, AMD'S financial position was improving, sales - both in terms of volume and net revenue - were increasing and costs, namley that of ATI integration and upgrading and expanding production sites, were likewise moving in the opposite direction. To put this into perspective the entire group was turning its fortunes around even with a line of outdated CPUs (the X2 series) and widely disliked GPUs (HD2000 series).

Although Phenom hasn't captured the hearts of enthusiasts - yet, it is finally in the marketplace and will in all likelihood sell very well with OEMs and the intial wave of upgraders from X2 machines. After all, who will want to buy a core 2 duo from a big vendor when you can get a 4 core Phenom for much the same price?

Initial production seems to suffer from teething problems, which has spooked almost universally nervous investors already perspiring before a large debt pile at AMD, but it will no doubt improve and will in time draw these same speculators back. Before measuring up a new coffin for the ATI/AMD, perhaps one should look back on a similarly problematic new product: The pentium 60/66.

 

[rallyimprezive]

You are all wrong.

Its a two way street. The stock market is a reflection of the overall economy. The overall economy affects business's profitability, business's profitability is reflected in the company's stocks, which affects the overall stock market.

I know thats a lengthy way to say it, but its a transitive relationship.

All that said, AMD apears to be oversold under heavy volume. I tend to agree that this is because some weak investors got scared and bailed. The stock will drop well below their worth, then most likely after the holidays, the stock will level off and establish a new bottom.

But im probably wrong.

 

[spoonboy]

If there is ever a time to not see stock market value as a true indication of a companies worth, its probably in the middle of all the mess and phlim phlam flying about the world markets now.

 

[rallyimprezive]

If there is ever a time to not see stock market value as a true indication of a companies worth, its probably in the middle of all the mess and phlim phlam flying about the world markets now.

I agree. This is definently a market for the day traders. The long term folks should probably just not watch for a while.

 

[caamsa]

Here is an interesting article posted in Google Finance.

Titled: AMD vs Inell Oil money and hafnium

http://www.economist.com/business/displaystory.cfm?story_id=10180738

 

[aevm]

I didn't realise that AMD had been selling sub-prime mortgages as a sideline; no wonder they're in trouble!

Hint: Citigroup wasn't hit by 'the market', but by the news that it's going to have to write off billions of dollars that it lent to people who couldn't afford to pay it back, so they could buy overpriced houses; news so bad that their CEO had to resign.

Here, for example:

http://www.bloomberg.com/apps/news?pid=20601039&sid=atmcXt12n470&refer=home

Well, yeah, of course. Citigroup is in fact one of those that caused the current market troubles, not just a victim. I've read quite a bit about them recently. Then I bought a bunch of their shares. I'm sure it will turn out to be a smart investment in 30 years or whenever I retire. 😀 I'd do the same with AMD, but I'm afraid because with them I'm not so sure they'll be able to survive and come back.

 

[turpit]

Now, the 'maybe' not so good news.
The Dow is rallying a little bit today, perhaps from some initial reports of a strong black friday...but AMD isnt rallying with the dow. Thats not a good sign.

But then again, its a monday, so all bets are off.

 

[russki]

I don't think you can say it's fair to say that the stock market is the reflection of the overall economy; there are plenty of companies that are countercyclical and do well when the overall economy struggles. There are those whose market cap goes up as the overall market (which is an indefinite term; what is market? most people mean the index, but what index? dow / nasdaq? wilshire? those are just cross sections of the market based on certain parameters) declines, such as REITs, for example, during the last down market period.

And I don't think it's fair to say that the stock market is there to represent worth of companies; it's not the purpose, it's a consequence, and a very questionable one at that; clearly lots of people got it wrong in the late 1990s / early 2000s.

To those that don't understand how capital markets affect the stock market (it's actually in more ways than one but...) in this case it's the fact that every company carries debt (there are precious few that don't, some very rare conditions need to be met), and so the cost of debt / availability of debt for refinancing will most certainly affect the company's future profitability, which is what heavily influences valuations and market pricing.

Oh, and Sailor: "A Random Walk Down Wall Street" 😉 Just kidding. Of course you can beat the market.

 

[aevm]

OK, guys, help me out: I want to buy some AMD stock some time between tomorrow and March 1st. What price should I wait for? $10/share, $7, $5? Not buy at all?

Edit: I'm talking long-term here, by the way. I still have some stocks I bought in 1996, for example.

 

[justinmcg67]

I'm guessing a rep from Intel will say, "Can we buy you for $6,000,000,000?" Wonder what the answer would be...

 

[TechnologyCoordinator]

OK, guys, help me out: I want to buy some AMD stock some time between tomorrow and March 1st. What price should I wait for? $10/share, $7, $5? Not buy at all?

Edit: I'm talking long-term here, by the way. I still have some stocks I bought in 1996, for example.

If you buy in the next couple months you're gambling on Q4 earnings. I'd say wait until after Q4 earnings then buy.

 

[TechnologyCoordinator]

FYI: AMD stock is trading for below $10 today. Although some of the recent drop can be attributed to a market wide slump. But do remember, it was above $40 back in the glory days.

 

[spoonboy]

AMD was a much simpler outfit in those days, less fingers in less pies, less fabs, much less debt, nice returns all round. Plus there are alot more AMD shares out there now than back then.

 

[spaztic7]

As soon as AMD stock drops to a point that I can invest a few hundred in then I will. I am looking at this as probably a great time to buy stock in them, yes they are in a decline right now but this means it is cheap to buy it. Hell, if I buy stock at 9 bucks and it goes up to 12, lets say I have 25 shares in them, I can make an easy 75 bucks (or what heppens if they manage to go back up to $20 a share?)..... I just think this will be a good time to start looking into buying AMD stock.

 

[BSMonitor]

Anyone buy into Apple 2-3 years ago when it was $7 a share?

Now trading at $175!

Hmmm, Intel Macs turned out to be a good thing I see...

 

[spaztic7]

No, Macs are still macs. That is their number 1 problem. If I could I would have bought all the stock and then closed the company. I really don't like macs..... troubleshooting a mac killed my inner child.....


Other then that, they are fine.... i guess.... if i have to....

 

[ATIWOLF]

After 40 years of investing, I've learned the market pretty well. I do pay attention to my investments. Its not just my investments that are down, its the market as a whole. These things happen from time to time and I've seen quite a few of them. One of the things I've done is called "contrarion investing", that is, buying as the market drops. So in the case of the one stock which I mentioned that has dropped 50% in value, I bought more of it. When the market does go back up, as it eventually will, I will make back everything I lost on the original investment and far more on the buys made while it was down. In the meantime, I'm getting paid good dividends, so all is not lost be any means.
And your friend is right. All that's needed is patience to hold on through the downturn and not panic and sell off.

😀 I just ordered 50 shares of AMD on my VSE account. 😉 ?

 

[enewmen]

Old news.....the whole stock market is hurting...........

Stocks slumped Wednesday, with the Dow closing at a 7-month low, as worries about the credit and mortgage market and higher oil prices hit investors hard ahead of what for many will be a long holiday weekend.

Treasury prices rallied, the dollar fell, oil prices edged lower and gold prices rose.

The Dow Jones industrial average (Charts) lost 211 points or 1.6 percent. That set the Dow at its lowest point since April 17, when it ended the session at 12,773.04.

The S&P 500 (Charts) index lost 1.6 percent and the Nasdaq composite (Charts) lost 1.3 percent.

The stock selloff was very broad, with homebuilders, banks, mortgage lenders and technology shares leading the decline.

Even Intell stocks were down..........

I agree, blame the week dollar. People are buying gold, not american stock (or dollars). Raise interest to keep things from crashing further. Anyway, I think lowering the rates further will just artificially inflate the economy. No bashing please, I'm a computer expert, not an econ expert.

 

[spoonboy]

Also if AMD looks in real trouble (not community opinion, I mean market opinion, articles in the papers saying the end is very nigh, that kind of thing) the shares will really sink. Then you could take a gamble on buying some in the hope that someone will come along and buy them. Nothing like a good takeover to boost the stock price.

 

[TechnologyCoordinator]

I can invest a few hundred

I don't know how that would work well. Back when I traded I used Scottrade, which has really low commissions of $7. So in order to make money the stock would have to go up enough to cover the $14 in commissions (7 to buy, 7 to sell) assuming your commissions are that low.

So if you were to take $300 and buy the stock the first 4.6% gain would recoup your commissions.

I don't have a lot of money that's why I don't invest anymore. I would always invest a minimum of $1,000-$2,000.

At $2,000 and a $14 commission only the first 0.7% gain would cover the commissions and the rest would be gravy.

 

[Scotteq]

Nothing like a good takeover to boost the stock price.

Takeover.... AMD.... ATI.....



/chuckles softly and wanders off






{Sorry - One of those juvenile comments that just had to be... Not trolling, I swear!!}

 

[aevm]

I agree, blame the week dollar. People are buying gold, not american stock (or dollars). Raise interest to keep things from crashing further. Anyway, I think lowering the rates further will just artificially inflate the economy. No bashing please, I'm a computer expert, not an econ expert.

Yeah, same here. I'm just guessing they're trying to ease the mortgage crisis first, and worry about the weak dollar later. Lowering interest rates will allow some people to keep paying their (variable interest) rates, which means they get to keep their homes and the banks get fewer losses too. Close to an election year, politicians are usually VERY reluctant to raise rates too.

Yes, this is going to make the US dollar weaker, but it's good for US exporters. For example Amazon USA sold me $1000 worth of DVDs this fall, what with the Canadian dollar at 1.02 or 1.10 US.... I wouldn't have bought that much at 0.70 US.

 

[enewmen]

Yeah, same here. I'm just guessing they're trying to ease the mortgage crisis first, and worry about the weak dollar later. Lowering interest rates will allow some people to keep paying their (variable interest) rates, which means they get to keep their homes and the banks get fewer losses too. Close to an election year, politicians are usually VERY reluctant to raise rates too.

Yes, this is going to make the US dollar weaker, but it's good for US exporters. For example Amazon USA sold me $1000 worth of DVDs this fall, what with the Canadian dollar at 1.02 or 1.10 US.... I wouldn't have bought that much at 0.70 US.

Good you're able to buy things cheaply from the states. But I don't think you will want to invest in a US company that has a profit in sinking dollars.
Also, would it be easier to just change the variable interest to fixed so people can keep the homes?
Some wise guy from Cambodia told me. If you have to take out a loan to buy something, you can't afford it.
Anyway, I think raising interest is a LOT less scary than raising taxes.