What if AMD went bankrupt?

[Raviolissimo]

well let's see

this is the Yahoo Finance page for AMD. balance sheet, income
statement, cash flow statement, links to Edgar reports, AMD
financial documents.
http://quote.yahoo.com/q?s=amd

their market cap. is $3.96 billion - $7 a share - last time it
was this low was after 9.11. i'm not sure when Athlon 64
came out but AMD was $2 billion market cap. when the
stock market re-opened the week after 9-11.

market cap. being total # of shares outstanding x share price.

so it would be real easy for various tech billionaires around the
world to buy. the Mexican guy, "Slim", the person that owns
Univision, $25 billion he's worth or something. there are a lot,
maybe 50 (?) people wealthy enough to write a check without
putting too big a dent in their finances.

plus investment groups. heck, Matt Simmons in Houston
manages $60 billion for energy industry investments. investment
groups like that, or Carlyle, can also write the check for AMD.

accounts payable $2,309,000,000
Long Term Debt $3,672,000,000 <-- the ATI purchase ?

receivables & cash - about $2.5 billion

http://quote.yahoo.com/q/is?s=AMD&annual

lost $47 million last quarter, so they're running about "flat".
having made $230 million + $220 million in quarters ending
December 06 and 05.

(personally i'd like to see them keep making socket 939.)

i don't think AMD will go bankrupt. they have a worldwide
market base, and with the dollar falling in relation to other
currencies, it's that much easier for other countries to buy
American CPU's.

plus Intel seems to be abstaining from releasing the
Q9450 for a while, which for $310 or whatever could really
crush Phenom sales. it seems like AMD's fate is partially
in Intel's hands.

 

[Scotteq]

it seems like AMD's fate is partially in Intel's hands.

An insight which compels me to remind the viewers it would be inappropriate and vulgar to make analogies comparing it to having your junk in your ex-wife's hands...

Yes.... Inappropriate...

 

[yipsl]

AMD is largely having financial issues due to the ATI M&A, and people seem to forget that a reasonable ROI for a merger/buy out of that size is 3-5 years. It's only been about 2 years since AMD sealed the deal with ATI. Remember that AMD was looking at being in the black 4Q 2007 or 1Q 2008 prior to the Phenom TLB bug. So, all things considered, if it takes AMD until the end of 2008 to get in the black, they are not as bad off as some zealots would make them out to be.

First the serious answer:

AMD reorganization would be no big deal. The ATI acquisition will finally pay out with Swift and other Fusion CPU's because that's good for the notebook market, which beats the enthusiast desktop as far as profits go. AMD has good graphics with ATI, good chipsets with ATI and will get their bug and 65nm issues behind them.

They will be profitable again, and some BoA analyst will probably recommend "buy" just like they recommended "sell" today. That same BoA analyst also rated Intel "neutral", which means that the suits in the financial industry are worried about tech stocks (God help our 401K's!) in at least the first half of 2008.

So, even if AMD is in the same position vis a vis Intel that they were in back in the K62 days, then it's no big deal. They are selling Phenom's as most desktop users won't encounter the bug and $189 at Newegg is a good deal for a quad core CPU that's still 17-25% faster per core than the equivalent Athlon X2. It's also not too far behind the cheapest Intel quad core, which costs around $50-60 more.

Even at 45nm AMD will be competing against Intel's 45nm offering, so we'll see how that goes. They'll probably be incrementally behind in GPU scores and slightly behind in CPU benchmarks, but so what? Profits can be made in the budget and mainstream markets. It's not all about $1,000 enthusiast CPUs and $650 GPU's (or $1300 SLI or Crossfire GPU setups).

The snarky answer:

At Tom's Hardware, when AMD goes bankrupt, the Intel fanboys will have a trollgasm. They simply will be beside themselves with glee. They will chant mantras, pray to whatever dark deity they used to follow in their Cthulhu roleplaying game and maybe even start rumors galore.

If AMD is bought out and Intel has the only desktop CPU's for several years, the same fanboys will get a second mortgage just to cover their enthusiast upgrades, which will probably cost $1500 per CPU. So, be careful what you wish for, you just might get it.

Me, I'm wishing that both companies remain profitable and that there's innovation and processors in my price range. I'm still not decided if I'm going to get one of the upcoming 3.0 gigahertz 65 watt Brisbanes or give a 65nm Phenom a try. I currently have an X2 3800+ Windsor 65 watt in one PC and an X2 4600+ Windsor 65 watt in the other. The 2.0 gigahertz should be upgraded for this year, but will the 2.4 gigahertz X2 be adequate?

Just don't tell me to ditch my ASUS 690G motherboards and go Intel 35 whatever chipset with an Allendale! IMHO, the only good thing about Intel right now is they chose (free) Crossfire over paying Nvidia for SLI.

 

[caamsa]

"2012 meteor supposed to destroy the Earth"

Doom and Gloom
Doom and Gloom

I love putting things in perspective.

 

[bliq]

actually, i think the result will be similar to what happened between microsoft/apple. Intel is in no mood to get sued for being a monopoly, so chances are, they will throw money at amd. Enough money to keep the company limping along, but not enough to make them a threat in any way. It would be better than being broken apart. Microsoft did that with apple a while back, but apple (i think) has since bought back all the shares microsoft owned.

That is exactly what I was thinking. Intel can't afford for AMD to be seriously weakened as there are no other viable direct competitors, which means Intel's hands would be tied when it tried to acquire new assets or technologies among other effects of being a monopoly, like greater scrutiny from the government.

They would rather invest in AMD and prop them up into a strong competitor rather than see them fail and hamstring Intel's ability to make money.

 

[TechnologyCoordinator]

January 2 2008: 5:54 PM EST


NEW YORK (AP) -- Shares in chipmaker Intel fell Wednesday after Banc of America Securities downgraded the company to "Neutral" from "Buy," predicting upside will remain limited until the second half of 2008.

DOOM AND GLOOM
DOOM AND GLOOM

True, INTC shares dropped nearly the same percentage as AMD stocks. The difference? INTC hasn't lost half it value in the last few months, AMD has.

AMD is in the DOOM AND GLOOM position.

However, if someone was to blame today's AMD drop on the market, they could actually be correct for once.

 

[OlSkoolChopper]

Even though AMD is at firesale price right now, does it realy make sense for anyone to take it over? They've made a total sham out of thier CPU operations, they have nothing taped out that is going to make one whit of diference to their total lack of competetive position, the curent ATI cards on the market are ok, kinda, but nothing to write home to mother about, so why would anyone want to pull $4 bil out of thier checking accoutn that they could spend on coke and hos and penile extention surgery to bail out this sad sack bunch of losers?

 

[Mandrake_]

Hector got cocky in 2005, with the 'dual core duel', sending 'multicore for dummies' books to IDF etc. I bet the pasting Intel's been giving AMD lately has wiped that smirk off Hector's face. :lol:

 

[TechnologyCoordinator]

Purchasing AMD is probably the only point of entry into the CPU market. The technological barrier to entry is too great at this point.

 

[OlSkoolChopper]

Purchasing AMD is probably the only point of entry into the CPU market. The technological barrier to entry is too great at this point.

Yeah, but it's like buying into an Everest expedition on the beach! :lol:

 

[deminicus]

what I am wondering is what amd will do with ati to make some money and hopefully destagnate the gpu market. nvidia has been milking the 8800 line for too long I think.

 

[caamsa]

Yeah, but it's like buying into an Everest expedition on the beach! :lol:

 

[turpit]

Oh look. A Scooby Snack.

 

[slim142]

I have to accept Im somewhat an Intel fanboy. I say somewhat because I dont say on the forums BUY INTEL ONLY or I LOVE INTEL, is just that I always sticked to their cpus and really liked them.

Now, I also gotta say I wouldnt want to see AMD bankrupt or in low-sales times like this one because that means no competition for Intel and even worse, no pressure. Tell me something, who is pressuring Intel to release Penryn? Promised for january and now is scheduled for feb-march. On the other side, if there is no high-end counter attack from AMD (ATI), what makes NVIDIA release a 9800GTX? mid-range card 9600GT scheduled for feb, high-end D9E schedule for June, isnt that enough prove that NVIDIA has NO COMPETITION in the high-end market??!!.

I really hate to say it but AMD is currently in a bad position and they need to improve barce architecture and start thinking about 45nm die shrink soon. More than die shrink, I believe they need to create a new architecture and at the same time improve barce. Same as Intel, while doing miracles with presler (somehow, smithfield) they were developing core and whats next? a kick-ass architecture that promises a long-time income profit which can be further improved. See how it works?

With AMD releasing tri-cores, hopefully it will help (since there are still people buying HPs and Dells, they will come with tri-cores for sure for the good price/perfomance segment)
Radeons 3870 and 3850 are helping them too and hopefully, the crossfire X configurations will keep the gfx card section up

The question is, what is AMD going to do about the High end? We all know that a Phenom at 3.0ghz wont help (probably with the B3 step, but is already proved that barce CANT clock at speeds higher than 3.0ghz, and 3ghz is with a lucky barce)

Hopefully 2008 will be better for AMD

 

[intelamduser]

January 2 2008: 5:54 PM EST


NEW YORK (AP) -- Shares in chipmaker Intel fell Wednesday after Banc of America Securities downgraded the company to "Neutral" from "Buy," predicting upside will remain limited until the second half of 2008.

DOOM AND GLOOM
DOOM AND GLOOM

Will all who think that becuase INTEL's stock price went down today is some kind of defense for AMD losing over 60% of it's value in 1 year please raise your hand.

AMD was at $20.40 this time last year. They are at $7.35 today. If you want to compare Intel to AMD during the same time frame Intel was at 20.35 last year and closed at $25.35 today. A gain of 20%. Those who had $1000 worth of Intel stock last year now have about $1200. Those who had $1000 of AMD stock now have about $400.

B of A downgraded Intel to nuetreal becuase as they estimate the market will remain flat for Intel until the second half of this year, who knows they are just speculating. They downgraded AMD from Neutral to sell, does anyone want to guess what they are thinking about the future of AMD stock? Once again they are just speculating but they have a pretty good model from which to make this speculation.
Anyone who wants to defend what is happening and believes there is a turnaround by AMD should sell everything they have while they can buy stock at a little over the cost of a six pack of beer per share. I am afraid that before it is over they might be lucky to get a couple of cans.

I am not bashing AMD just to bash them. They have acted like a company who does not have a clue, living on their past succcess.

I doubt AMD will file for bankruptcy if things get to that point becuase they pretty much already are at that point. When you don't make enough money to pay your bills you can survive for a while by borrowing from peter to pay paul. When you start lying to peter you are pretty much done for. AMD made promises and commitments and have not performed.

I do think that unless something miraculous happens and AMD is able to salvage enough market share to keep their head above water there will be a buyout for whatever part of AMD is profitable. The debt will be written off by whoever makes the purchase. The stock holders will be bought out for dimes on a dollar.

Call it doom and gloom if you will, or call it just the way things are.

 

[harna]

Oh No No No Nooooooooooo!!! AMD gone, Intel integrated video forever? No place for a tech-head to live. It just can't happen! Ok guy's let's be honest it's AMD/ATi and Nvidia that make Intel look like they've got the lead, without them we'd all have office computers with celerons in them cause we couldn't afford the good stuff. Well at least there wouldn't be another Crysis ever again?

 

[darkstar782]

What ever happened to pwr watt????? Oh thats right... Even the Phenom 9500 uses more than a Q6600.

To me and alot of others, as long as the CPU runs and the cooling is adequate to keep it running, I don't give a damn if it uses 10W or 1000W.

An overclocked Phenom can beat a stock Q6600, but the Q6600 can overclock more.

On the other hand, I have a Q9650 and don't give a damn about either

IMHO "performance per watt" is just something companies clutch at when they are loosing badly in the performance stakes.

 

[OlSkoolChopper]

Caamsa! Where did you find my dog? The last I saw him, he had snuck into the bottom end of an Ironhead. I put on the barels and sent it off and never saw him again!

To quote a "Regal" character who was once a feature of this board but may now be in hiding in the AMD witnes protection plan.

"My dreams have come true!"

AMD IS IN FREEFALL!

$6.91! We did it! Yippeeee! Next stop: FIVE!

I want to buy AMD once it gets cheap enough. Not just stock, the whole damn company. And it will soon!

"Doing my AMD hapy dance"

 

[chunkymonster]

Mind elaborating why the government would step into the picture to ensure AMD remains solvant?

1. AMD doesn't have that large of a workforce where if everyone was suddenly lost thier job the unemployment rate would be negatively impacted in a substancial way.

2. The products which AMD provides do not negatively affect a large number of both general consumers and business, financially speaking. As an example, if a large bank like Citibank were to be on the brink of collapse from the sub-prime crysis then the government would step in because:

a. A significant percentage of the US population would loose their savings. (The gov't only insures up to $100k in the savings account.)
b. Many people would loose thier mortgage, thus they can no longer payoff the debt on thier homes and become homeless.
c. Business relies on the credit extended by Citibank to finance thier operations. Thus, the collapse of Citibank can cause a substancial number to companies across all industries to cut back on thier operation. This in turn means higher unemployee.
d. The failure of a large bank will also have substantial negative impact in the financial market which will cause a rippling effect across all industries.

AMD's demise will affect some OEMs and their own employees. But it will not have a substantial rippling effect across the entire economy. The local economies will be somewhat affected, but it will definitely not have a national effect.

Were AMD to suddenly implode, I really, really doubt the government would step in. If Intel suddenly makes a grab for AMD's CPU intellectual and physical assets and nVidia makes a sudden grab for ATI's aassets, then the FTC would step in and say no because that would means both the CPU and GPU market would become a monopoly.

An interest spin would be if Intel were to grab ATI's assets and nVdia were to grab AMD's CPU assets. You will still still have competition in both the CPU and GPU market between Intel and nVidia. But I don't really see that happening.

You can't compare Citibank to AMD, that's just silly.

AMD going bankrupt and being liquidated with over 16,000 employees losing their jobs, pensions, and health benefits is a BIG deal and would have a very large and negative impact. You can't minimize the human factor and the tertiary affects that many people suddenly out of a job would have. How will mortgages get paid? Who will foot the bill for ,edical expenses? What happens to the 53 year old employee with kids in college when his pension disappears?

Just because a company files for bankruptcy does not automatically mean a liquidation bankruptcy. The intent and purpose of filing bankruptcy is to protect both the creditors and the company. By the nature of bankruptcy, the government steps in to
ensure the creditors are paid and the company remains solvent. By filing Chapter 7, for example, AMD could restructure their debt while remaining in business and producing chips. Given AMD's industry and government partnerships, it is very unlikely that creditors will file bankruptcy against AMD as it is in their best interest (and the best interest of the consumer) for AMD to remain in business and become profitable, that is the reason they became a creditor of AMD to begin with.

 

[turpit]

Never, ever, count on any "government" or industry partnership for any form of protection. Allow me to assure you, that AMD, like any other company, is absolute squat in the eyes of the governement, and so much flesh in the eyes of the corporate "pack". Look to the lesson of Grumman the next time you beleive the government or industry has a vested interst in any company and will do anything to protect them. AMD has never, and likely will never be crap compared to what Grumman was IRT "government" and "industry" ties.

 

[bfellow]

If you want to see "protection" look at how AT&T is almost back to taking over all its baby bell companies. After 23 years SBC went and acquired Ameritech, AT&T, Pacific Telesis and Bellsouth and others. Now half of the original 22 are back under AT&T

 

[spaztic7]

OK seriously.... The right answer the the topics question is.... They wouldnt have any money.

 

[jimmysmitty]

To me and alot of others, as long as the CPU runs and the cooling is adequate to keep it running, I don't give a damn if it uses 10W or 1000W.

An overclocked Phenom can beat a stock Q6600, but the Q6600 can overclock more.

On the other hand, I have a Q9650 and don't give a damn about either

IMHO "performance per watt" is just something companies clutch at when they are loosing badly in the performance stakes.

Actually performance per watt was a AMD thing with A64 after Intel released Prescott that used more power to get the same performance. And I am jealouse that you have the QX9650 but still love my Q6600.

And to what GHz does aPhenom have to go to beat a Q6600 if even a Phenom 9900 couldn't beat it? And you are right. A Q6600 G0 stepping will normally go to 3.2GHz on air easily, 3GHz on air without a voltage increase. I wounder what a Phenom will got to without voltage increases considering they already run hot and use more power.

 

[chunkymonster]

Never, ever, count on any "government" or industry partnership for any form of protection. Allow me to assure you, that AMD, like any other company, is absolute squat in the eyes of the governement, and so much flesh in the eyes of the corporate "pack". Look to the lesson of Grumman the next time you beleive the government or industry has a vested interst in any company and will do anything to protect them. AMD has never, and likely will never be crap compared to what Grumman was IRT "government" and "industry" ties.

For as many examples as there are of "government" not offering any form of protection there is another example where businesses are offered/given tax breaks and incentives in order to remain solvent. I suppose it depends on what your definition of protection is?

This chatter about AMD going bankrupt or what would happen if they did has, well...I just hope no on really wants AMD to go out of business..to what end and what purpose would it serve...TLB errata issues or not, less than $200 for a quad core is hard for any real hardware enthusiast to pass up, how can you not want one just to play with, when you get bored with it you can always oc it until it fries the circuits...

 

[jaguarskx]

You can't compare Citibank to AMD, that's just silly.

My example simply illustrates that should AMD shutdown operations due to bankruptcy, the impact on the economy will not be as severe as a company like Citibank. Yes, 16,000 people loosing their jobs (if that's AMD's actual workforce) is not something to laugh about, but it will not create a nationwide crisis. If Citibank were to falter, then the government will step in to intervene because Citibank's operations touches a wide range of industries and people due to mortgage.

It's simply a numbers games. In my opinion I cannot see why the government would step in to bail out AMD if "only a mere" 16,000 people would loose their job as opposed to potentially millions of people loosing their mortgages on their homes, and potentially hundreds of thousands of jobs in companies that relies on Citibank for financing and lines of credit to maintain operations and for expansion.