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

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Dat is a big hat, though. :ouch: . o O ( :pt1cable: )
 


TC you do seem on a bit of a crusade, regardless of if you already have an amd machine or not, that doesnt make you immune from crusade acusations. You too also posted some slightly iffy information, saying that amd's stock dropping 4% or so on one trading day was down to dropping of quad-fx, when it appears that this was almost with cast-iron certainty down to a downgrade from 'buy' to 'neutral', so, enough with lecturing the kid.

It might actually surrprise you that amd is not in financial trouble. They lost alot of money during 2007, but they have probably something like the same amount again in spare cash. Sales are rising, costs are falling. All the new lines have entered the market. With these they will quite likely make quite alot of money next year. New gpus are good, new cpus will find their way into cheap oem machines in the hundreds of thousands.
 
ok settle down children... :non:

Getting back to econ 101: First off the markets expand and contract all the time. Currently it's not a wise time to invest in tech or cpu makers. For one while Intel has been doing well for sometime now there stock is still stuck in the mid to upper $20's this is way off their high. Why would you buy a range stock? Unless your happy to just receive a dividend.

Amd is in a worse position. But you have to understand tech is a boom to bust type stock. When the times are good they are really good and when times are bad things are downright awful.

Intel stock while better than Amd is nothing really to cheer about. IMHO.

It's true you should avoid investing in any company that gets paid primarily in USD {CURRENTLY}, because the dollar is likely to fall further. The reason the dollar has fallen is complex but these events have happened before throughout history.

Part of the problem is too many dollars on the market. If the FED keeps priniting money like a drunken sailor this will continue to worsen. It's common knowledge when you flood the market with something the value of if falls. Being that the USD is tied to oil payments this is another facet that makes up the USD's problem. If oil keeps going up it takes more dollars to buy it and the dollar becomes worth less and less. This is only part of the problem.

As far as US interest rates go... the FOMC is between a rock and a hard place. The subprime mess has caused liquidity crunches because all the banks are fearful to lend money... to pretty much anyone including other banks. So when they pull out there's not enough liquidity in the markets for them to function properly which is why the FED has at times had to inject billions of dollars into the market to free things up.

Interest rates have been dictated more or less by inflation or the lack thereof. Additionally if growth is above 3 -4% It's common the FED will step in raise rates to slow things down for fear inflation will come along and spoil the party. Currently fast growth is not the problem it's actually the opposite. So the FED will likely lower rates again come Dec 11. If inflation ticks back up rates will go back up and this could happen quickly due to soaring energy prices mostly.

In regard to interest rates there has been a shift in other countries that has caused the dollar's interest rate to be less than other countries like the UK, Swiss, and Japan has had very cheap swap rates for some time. By carrying these currencies or baskets of them in hopes they will appreciate because they are paying a premium over what the USD charges. [Commonly known as Carry trade]

If you've read the news lately you might have heard about carry trades unwinding etc. This usually happens when you have a one way bet and some bad news comes out that make the carry side of the trade fall apart {LOSSES}. But the Carry trade is also one facet of many that has caused the dollar to fall or exacerbate the problem.

Raising interest rates for the US would have a devastating effect if it were to happen. Countless people would be foreclosed upon, job creation would fall and so would the stock market... unemployment would rise etc. It would be very bad to say the least. Let's hope for everyone's sake the rates stay low for the time being. Next we need someone in the WhiteHouse that knows how to balance a friggin check book... we need to cut the national debt back to Y2k levels. This will inturn take $ off the open market and bring supply back in line with demand. This is my opinion what needs to happen, but you know everyone has their own opinion. :pt1cable:

There is much more that goes into this than what I've said here, but this is a basic glimpse of what is currently going on.
 


About that "drunken sailer" remark. I don't print money when I'm drunk, I spend it! :kaola:

As to the rest of what you wrote, its pretty much true. However, I'm a contrarian investor who buys when the market price is down. Its easy to buy when the market is doing well, but when stock A is selling at $40 in good economic times, for instance, the likelyhood of its raising higher is not much, However, if stock A drops to $10 in bad economic times, then it becomes a smart buy, because when good economic times come again, it will raise back to the area of $40, where it was in the beginning.

There are three main reasons for a stock to drop in price. One is that its products aren't selling well. How many people buy an outdated or defective product? Anybody buying Ageia Phyixs accelerator cards?

A second is that the market in general is down. Fluctuations occur in pricing, there may be a product oversupply that needs a correction. This occurs in regular cycles, whether its an oversupply of cars, houses, or any other thing. When there are multiple products that are in oversupply, the entire market gets affected and not just one sector.

A third problem is panic selling. This can occur for many reasons, but the result is generally the same. The Fed chairman coughs during a speach, an Arab leader makes a stupid comment driving up the spot price of oil, whatever. The market reacts and a blind selloff starts. Companies that are in no difficulty what-so-ever get brought down because brokers go into a sell mode. At some point in time, the brokers wake up and start buying again. The reasoning behind the buy back may have as little good reason as the selloff. It doesn't matter the reason, what matters is the results.

You mention Intel and AMD. Ok, Intel is a huge company and the current price war is hurting it, but because of its sheer size it can take quite a beating and keep on going. AMD is tiny in comparison. It makes a mistake and the damage is far greater in proportion. Then again, if it does something good that sells well, it effect is equally great in its bottom line. AMD has had a bad year, but I personally think it will recover. The new ATI line of cards are selling well. Phenom has some problems, but they might well get fixed one way or another. Barcelona is selling ok, not a standout, but ok. With the Arab investment, the next year might be a lot better. I think the fact of the Arabs investing hints that something good will be happening, as they have analyzed the company and they wouldn't throw away money on what they thought was a looser. Personally, I think AMD is a great buy, though one that takes some patience. AMD was over $40 less then two years ago. At $10 a share, it has very good growth potential. I'm not saying that it will go up to $40 again, but it could well reach $20 or more within a couple years, maybe less, and that would be a good investment in any terms.
 
egigma067
"Neither Intel nor AMD are going bankrupt any time soon. The government will not allow it."

It seems most equate bankrupt as goining out of business. WCOM went bankrupt, AND they are still in business! It is a way to cancel debt. Of course, stock holders are left with worthless shares, and when the company re-emerges they issue new stock. The US government IS NOT goining to prevent this if this is the route AMD chooses to go, If they have to.

NOT saying they will, But the arguement " The US Government will not let it happen" is bogus.

To Sailer - Good luck on your "Gamble" and I agree with your rationale, 40/60 your favor.
 


And your point of this is?

Of course, Intel is in far better financial position than AMD at the moment, as most people can guess.
 
The S&P has taken a hit just like every other major index and with a magnification index above 3 it isn't unreasonable for AMD to lost 18-20% given the market is down 5-6% so we don't seem to be dealing with a massive decline due to Phenom Like TC would have us believe... maybe a 3-5% decline which is more palatable.

Just playing devil advocate :)
 


Well, things don't look so rosy for AMD now do they?!

Sometimes I wish Intel didn't own so bad right now, but then again they've been pretty good with their price.
 


Ok. As far as how far the market is down, I was hearing it said a day ago that the market is down by over 10%, thus making the present situation a "Correction" of overpricing. The meaning of this is that hopefully the market will turn back up again. If it continues to go down, then the predictors get far more serious in the overall consequences.

Anyone buying gold these days? Last I read, it was almost $800 an ounce. I really should have bought more last winter.
 
For a slightly longer term view (From May 06)

Also I perfer to use the Nasdax ETF, QQQQ. as a reference. Not the Best as it does contain non tech stocks such as a few bank - But closer in representative than the S&P 500.

QQQQ $40.74 -> $51.31 = GAIN of 26%
INTC $19.35 -> $26.08 = Gain 0f 34% (Graph closly mimics QQQQ)
AMD $30 -> $ 9.76 = LOSS of 67% ($30 is approx, from graph)

Keep in mind that if it drops to 5 (NOT saying it will) that becomes a trigger point for some mutal fund manager who will start dump, which would drive it lower. NT countered this by a reverse split (1 to 10)
 
Though I could be wrong, I'd expect that if AMD drops much below $7, it will end up being bought out, even if by hostile takeover. IBM has a bit of a claim on AMD and that's the first company I'd look to for a takeover bid. There's a couple others that might make a bid. If IBM took over, it could be a very good thing for AMD shareholders. Can't say about any others.

 
AMD has gone up/down all summer and ALL stocks have dropped after the summer house market reports..oil tradeing at $100 a barrel is not helping anyone.

On each $10k buy/sale of AMD I have made far more profit than the same amount of money spent to buy/sale Intel simply becuase the same amount of cash buys 2 times the shares of AMD than Intel.

AMD is the #1 best stock I have ever bought and when it goes back up just $1 I stand to make that much per the last 3,000 shares I picked up this past Friday...same amount if invested in Intel would return allot less.

On a down side I am also sitting on a $20K buy that will need to pass the $14 per share mark.

Most people just don't understand how to work stocks and just look at current prices.

I buy/sale in lots of 1k shares and a move of 50 cents/ $1 in a week makes me money and most weeks of the year this happens.
 
I expect oil may be going up a lot next week. Chaves has threatened to end all exports from Venezuela next week if he doesn't win the elections. Not sure how he'd stop exports if he looses, unless he somehow destroys the wells adn/or the refineries. Even if nothing happens, the oil traders will probably push the spot price way up. Best fill the car up with gas tomorrow.

I've made a bunch of money trading AMD this year as well, probably more than all my other investments. Some people hate volatility, but I see it as opportunity. I have a bunch of AMD shares from a higher price as well. I'm hoping to balance that with what I bought yesterday. Can only wait and see how things go.
 


WOW! You sir are daring! Of course with that much money in it you can let it go up a lil, sell, and make a hefty profit.

3,000 X $10 per share = 30,000

dayum!

If AMD goes up to $11 you'll make $3,000 bucks if you sell!
 


And that's how investors make money. Its not buying $500 or $1000 dollars of stock, holding and hoping, and then selling for small gains after paying the brokerage fees. Its buying 500 or 1000 or more shares and then selling for large gains.

Of course, there's a risk factor. If you buy a lot and it drops, well, let's just say I didn't buy a new sailboat because of what the market has done these last several weeks. Now I am holding, waiting, and hoping. Ok, I've bought a bunch of stock in a number of companies at these cheap prices. If the market goes back up to what it was before the sell off, I buy the sailboat and have enough to do some world cruising. If it keeps dropping, well, beans and pancakes aren't that bad, are they?
 
Ok I will admit that TC seems very anti-AMD but it is understandable. He bought into AMDs "upgradeability" spheal and now is looking and upgrading to something that 1. underperforms compared to 1 year old Q6600 and 2. doesn't improve(well currently) upon older architecture that is 4+ years old.

As per the stock market, the main hit it has taken has been in the subprime and mortgages market not the technology sector. It has been hovering around 12800-13200(for the Dow Jones).

AMD has been just dropping where as Intel has been hovering from $24.90-$26.00+ currently. You can really see the difference. In fact almost every firm that watches stocks has downgraded AMD to either neutral or sell where as Intel has been at buy for the past few months. The downgrades have hit AMD even harder which makes that $622 million investment almost useless.

The only way AMD will even be able to gain back both market share and value is if they get Phenom to compete in all ranges. Yea sure the low-mid range is important but even if they get them to compete remember that now that performance per watt and heat dissipation is very important now and Intels Penryns have that pretty well down tight.

I do personally think that CEO Ruiz screwed AMD up bigtime. He should have kept a lid on Phenoms performance since there was no physical proof. He also should have aquired ATI and let them do what they normaly do instead of making them focus on chipsets for AMD chips. He seems to be the same reason that ATIs R600 was not what it should have been.

Personally AMD needs major resturcturing in almost every department. First is in their advertising. They need to start showing the real facts and real proff instead of crap.
 


Um, it could have something to do with the fact that AMD is an American company, and he meant that he wanted a good company to buy it, as opposed to a bad company, since he obviously doesn't want AMD to fail. But you saw "good" and "american" next to each other, and decided that was politically incorrect because we all know America is the devil.

blah blah blah, America is corrupt, blah blah blah,we've heard it all before. US politicians may be corrupt, but newsflash, so are most government figures from any county, and I'd say we have it a lot better here than any other county. I thought our government was bad for a while, till I saw what was actually going on in other countries.
 
AMD's big issue is profitability, the stock market doesn't care about the performance crown. AMD's manufacturing process to make low-middle end processors is way too complicated and too expensive due to what I assume is low yields.
 


They were, now theyre not.

Im surprised your but has the bandwidth to spare for rainbows and your posts all together :kaola:
 


This reminds me of a quote from an English writer who said had he never met an American gentlemen. Then he added, ""May God forgive me for using American and gentleman in the same sentence". As for whether or not Americans and America is good or bad, I keep in mind that it was my English ancestors that came from England and settled in America back around 1607, so there must have been something good in America that attracted them and kept them here.
 
there must have been something good in America that attracted them and kept them here
Click to expand...

Ah, so many things... like no government, or king, or anyone of any authority at alll... which is great until you realise they wanted it to continue their loony religous practices.

And the problem with America, so-to-speak is that in practice they fall far short of their ideals. I'm going to get shot for that... but hey, as I said I like playing Devils Advocate. Your tenets are freedom of thought... provided you don't disagree with your government (cf Patriot act\getting into your country). Your ideals are democracy... in a country with a 98% incumbancy rate, a court that is non-elected and partisan, and a President that is... illegal. Your dream is to work hard and acheive... in a country where politcal and celebrety dynasities are common; there is massive gender and ethnic disparity of wealth and opportunity, and the top 1% of the nation own 40% of the wealth.

It's not that the rest of the world dislikes America... its just theres a difference between what they say and what they are. And, whilst you might point out its the same for the rest of us - and you're right - we a) dont have the bomb and b) don't have the cultural hegemony and c) dont have the Fundamentalist Christians acting as "Leaders" for the rest of us.

America is great - we just get dissapointed when you fail to reach your own standards.

and [/rant]... breathe...

Apologies... for all concerned.
 
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