Saturday, July 12th 2008

Bloodbath for AMD at the Stock-Markets, Company Struggles to Survive

Sure, the graphics division brings some cheer for the company but seriously, to what extent is it helping the company alongside a marginally increased market-share with processors? Not much. AMD struggles to survive as stocks plummet below the $6 mark at NASDAQ index, which was priced at $15 /share only a year ago; this is the lowest value for the AMD stock since 2002.

AMD's survival is crucial for the entire computing industry as it keeps check on inflating prices by major players such as Intel and NVIDIA (who themselves are seeing bad days at the stock-markets these days). It has immense engineering potential to take on major players and force them to slash their prices. There are talks already doing rounds of CEO Hector Ruiz planning to quit.

Market forces and mal-informed consumerism are also to blame. A person chooses competitive brands over AMD products mainly because they're supplied and marketed better, sure Intel and NVIDIA do make better products in many categories but 'better' is a very relative value, how much better and for how much more (price) is something that keeps fluctuating, again fluctuations are mainly triggered by competition that AMD brings into the market. In other words, thank AMD for making NVIDIA sell GeForce 8800 GT for as low as $120 or better still, giving rise to a whole new SKU, the GeForce 9800 GTX+, with the '+' matching the red cross on first-aid kits.
Source: Yahoo Finance
Add your own comment

116 Comments on Bloodbath for AMD at the Stock-Markets, Company Struggles to Survive

#26
cdawall
where the hell are my stars
YES!!!!! invest now and try and try adn help bring it back up
Posted on Reply
#27
Unregistered
hmm i could spare $75-100 i suppose. could that become much larger in the future?
Posted on Edit | Reply
#28
DrPepper
The Doctor is in the house
Would be sad to see them go but I think if they badly needed money they could liquidate millions in machinery, also this might be because they didn't market as well as intel who have cpu's in nearly every OEM these days.
Posted on Reply
#29
Unregistered
but if I invest in INTEL now and say AMD goes under INTEL will be HUGEEEEE and money money money for meee.
Posted on Edit | Reply
#30
btarunr
Editor & Senior Moderator
If there has to be a 'sell-out', AMD goes to either IBM or Samsung.
Posted on Reply
#31
LonGun
quasar923hmm i could spare $75-100 i suppose. could that become much larger in the future?
I doubt AMD is going to fall. They should know better than anyone else.
Posted on Reply
#32
trt740
this looks kinda bad aswell as good AMD Stands Behind ATI, Write-Downs And All
btarunrSure, the graphics division brings some cheer for the company but seriously, to what extent is it helping the company alongside a marginally increased market-share with processors? Not much. AMD struggles to survive as stocks plummet below the $6 mark at NASDAQ index, which was priced at $15 /share only a year ago; this is the lowest value for the AMD stock since 2002.

AMD’s survival is crucial for the entire computing industry as it keeps check on inflating prices by major players such as Intel and NVIDIA (who themselves are seeing bad days at the stock-markets these days). It has immense engineering potential to take on major players and force them to slash their prices. There are talks already doing rounds of CEO Hector Ruiz planning to quit.

Market forces and mal-informed consumerism are also to blame. A person chooses competitive brands over AMD products mainly because they’re supplied and marketed better, sure Intel and NVIDIA do make better products in many categories but ‘better’ is a very relative value, how much better and for how much more (price) is something that keeps fluctuating, again fluctuations are mainly triggered by competition that AMD brings into the market. In other words, thank AMD for making NVIDIA sell GeForce 8800 GT for as low as $120 or better still, giving rise to a whole new SKU, the GeForce 9800 GTX+, with the ‘+’ matching the red cross on first-aid kits.

Source: Yahoo Finance
Market Scan
AMD Stands Behind ATI, Write-Downs And All
Melinda Peer, 07.11.08, 7:20 PM ET

Advanced Micro Devices





Advanced Micro Devices on Friday revealed it will take an $880.0 million write-down on the handheld and digital television units it acquired from ATI Technologies, which isn't the first time the semiconductor company has had to lower the value of an ATI-related asset. But the company stood behind its acquisition emphasizing that it's a long-term investment.

The goodwill impairment charge, or lowered book value of an asset, arose after the Advanced Micro Devices (nyse: AMD - news - people ) conducted an analysis of the businesses and determined that they weren't performing to its expectations, making it the second ATI-related write-down that the chipmaker has had to stomach since buying the company in July 2006. BMO Capital Markets Analyst Brian Piccioni estimates that Advanced Micro had $3.2 billion of goodwill and $1.2 billion of intangibles on its books following its purchase of ATI and in 2007's fourth quarter, the company had a $1.3 billion goodwill impairment charge and $400.0 million in intangibles from ATI.

AMD's stock closed Friday down by 12 cents, or 2.4%, at $4.84.

"Although goodwill and intangibles are just accounting plugs, with another $880.0 million of ATI-related write-downs, we believe AMD has effectively written off $3.0 billion (over 50.0%) of the $5.6 billion ATI purchase price in about 18 months," Piccioni said.

But Drew Prairie of Advanced Micro's media relations division, said the acquisition is an essential component of the company's long-term strategy to integrate Advanced Micro's microprocessors and ATI's graphics and chipsets.

"We're the only company now in the industry that has intellectual property in both of those main technologies," Prairie said, pointing to the company's recently launched mobile system and said that eventually, the company plans on integrating the technologies into a single chip.

In July 2006, Advanced Micro acquired ATI Technologies and its arsenal of graphics chips and chipsets for $5.4 billion as a way to better compete with Intel (nasdaq: INTC - news - people ). Analysts had a mixed response to the deal but seemed to agree that while the synergies where there, integration may prove difficult and Advanced Micro would still struggle to gain market share from Intel (see " AMD Makes Its Move").

Advanced Micro said the latest $880.0 million in charges will be recorded in quarter ended on Jun. 28. Also in its second-quarter results, Advanced Micro will record a restructuring charge of $32.0 million related to employee severance and $36.0 million in charges related to short-term investments. Of those charges, $24.0 million were related to the company's investment in Spansion (nasdaq: SPSN - news - people ), a semiconductor device company that specializes in flash memory. The remainder of the investment charge was related to holdings the company had in auction-rate securities.

Offsetting the charges, the company said it will report gains from the sale of wafer fabrication tools that will positively impact gross margin by $190.0 million.

Advanced Micro said it the impairment charges won't necessitate any current or future cash expenditures.

Broker Action: Motorola, Google

Big Banks Spark Rally

source yahoo finance/forbes thread link www.forbes.com/2008/07/11/advanced-micro-closer-markets-equity-cx_mp_0711markets40.html?partner=yahootix
Posted on Reply
#33
Unregistered
even if i invest now, say in the future AMD becomes close with INTEL, the price i could then sell the stock would be much more, correct?
Posted on Edit | Reply
#34
jyoung75
cdawallone thing i don't understand is it used to be about a 90/10 split between intel and AMD computers at bestbuy were i work now we carry more AMD's than intels yet the stock continues to fall?
See that's the problem...if you don't have the techology to command a premium in the marketplace, and you can only hold onto your market share by pricing close to cost, you're going to lose a crap load of money. And if you're doing that your stock is going to fall in the toilet.

People have always cheered AMD for offering price competitive processors. Yet their manufacturing processes, technology, and scale is far behind Intel so they are cost disadvantaged. If AMD is cost disadvantaged yet sells their processors cheaper, they are going to be out of business in a few years.
Posted on Reply
#35
imperialreign
keeping in mind also - however the numerous anti-trust investigations into Intel's practices turn out could seriously boost AMD's marketshare, and image, and their wallet as well. Intel is under scrutiny by nearly a dozen or more different organizations throughout the world, and we've already seen Intel get slapped with one fine from Korea . . . that's just the tip of the ice berg. If the US FTC finds Intel was in violation of fair-trade laws, Intel could be hit with a crippling fine, and could also be forced to pay AMD a certain amount as well . . .


right now is a prime time to invest into AMD; if I had the money I definitely would. Their share prices have been relatively stable for the last 6 months now;
Posted on Reply
#36
LonGun
quasar923even if i invest now, say in the future AMD becomes close with INTEL, the price i could then sell the stock would be much more, correct?
Maybe but I don't think that's gonna happen. If you're planning to invest now, AMD is not the company for you to go for.
Posted on Reply
#37
Unregistered
LonGunMaybe but I don't think that's gonna happen. If you're planning to invest now, AMD is not the company for you to go for.
wait, i thought it would be good to invest in AMD now since the stock cost so little now. should i buy intel and hope AMD goes out, or hope intel just keeps succeeding? how much is INTEL stock per share now? anyone know?
Posted on Edit | Reply
#38
ThomasDM
quasar923hmm i could spare $75-100 i suppose. could that become much larger in the future?
If AMD gets its act together you might get a decent return within a couple of years but before you invest money in a stock you really need to analyze the company. It's not a good idea to invest money in a company just because you like it or because the stock has dropped a lot. There's a reason why AMD dropped from $40 in 2006 to $4.84 today.

Besides, $100 isn't really enough to invest in the stock market. If your broker charges you $10 per trade your stock will need to rise more than 20% before you make any profit.
Posted on Reply
#39
Unregistered
ThomasDMBesides, $100 isn't really enough to invest in the stock market. If your broker charges you $10 per trade your stock will need to rise more than 20% before you make any profit.
so thats why brokers make soo much money. wow i didnt know that. im 16 and im not totally aware of how the stock market works, my dad does though.
Posted on Edit | Reply
#40
jyoung75
LonGunI doubt AMD is going to fall. They should know better than anyone else.
Based on what? Q207 they had an operating loss of $457M, Q307 a loss of $226M, Q407 a loss of $1,753M, Q108 a loss of $264M....get the picture? You can't lose $3 billion a year and stay in business. Especially not in this environment where debt has become very expensive and the market is ridding itself of money losing and risky investments.

The only hope AMD has is to deliver a victory in their CPU division similar to what ATI has just done to Nvidia (e.g., a GPU architecture that is significantly cheaper to manufacture and offers vastly superior performance). They have to come out with a processor that is CHEAPER TO MANUFACTURE and offers SUPERIOR PERFORMANCE to Nehalem, and they have to do it within the year. Otherwise the CEO will be forced to resign (he's promised yet not delivered on turning around the company, they continue to overhype and underdeliver on Bobcat, Bulldozer and other CPU designs) and the company will be sold at a 'firesale' to IBM or Samsung.
Posted on Reply
#41
Unregistered
what happens to stock holders and their stocks if AMD goes down and is bought out by a company such as IBM or Samsung?
Posted on Edit | Reply
#42
thoughtdisorder
Investing in stocks is always a gamble, IMO buying AMD stock would be a relatively safe investment. In fact, I was already eying their stock and this makes me very happy at the moment. (to some extent).:)
Posted on Reply
#43
jyoung75
quasar923what happens to stock holders and their stocks if AMD goes down and is bought out by a company such as IBM or Samsung?
Depends when it happens. If the company files for bankruptcy the stockholders will get wiped out and assets will be sold for pennies on the dollar. If they come to an agreement with IBM or Samsung before they are forced into bankrupcty there could be a lift in the stock if IBM or Samsung pays a price premium to acquire them (similar to what AMD paid for ATI).
Posted on Reply
#44
jyoung75
btarunrAMD’s survival is crucial for the entire computing industry as it keeps check on inflating prices by major players such as Intel and NVIDIA (who themselves are seeing bad days at the stock-markets these days).
This is exactly why the company is about to go under. They aren't cost competitive with Intel yet continue to price lower than them (mainly because their technology and manufacturing processes are inferior yet they have to do something to maintain market share). Result...Intel is making a boat load of money and AMD lost $3 billion in the last year. That's dangerously close to bankruptcy which is what the stock reflects.
Posted on Reply
#45
TheMailMan78
Big Member
imperialreignkeeping in mind also - however the numerous anti-trust investigations into Intel's practices turn out could seriously boost AMD's marketshare, and image, and their wallet as well. Intel is under scrutiny by nearly a dozen or more different organizations throughout the world, and we've already seen Intel get slapped with one fine from Korea . . . that's just the tip of the ice berg. If the US FTC finds Intel was in violation of fair-trade laws, Intel could be hit with a crippling fine, and could also be forced to pay AMD a certain amount as well . . .


right now is a prime time to invest into AMD; if I had the money I definitely would. Their share prices have been relatively stable for the last 6 months now;
This is why I invested about 18gs in them a month ago. AMD is fine. I don't gamble much and this has been a safe investment thus far. If IBM buys them out Ill make a killing. They are known for taking care of shareholders. There is a reason why they are a blue chip company.
Posted on Reply
#46
Unregistered
so the chances of good things may potentially be greater than bad things happening if i bought AMD stock. 1. they could get back up near intel. 2. if they go out they could sell to IBM or Samsung who would offer me more money than i bought the stock for now most likely.
and the only bad thing would be 1. they go bankrupt.

2-1 odds in my favor :)
Posted on Edit | Reply
#47
imperialreign
jyoung75Based on what? Q207 they had an operating loss of $457M, Q307 a loss of $226M, Q407 a loss of $1,753M, Q108 a loss of $264M....get the picture? You can't lose $3 billion a year and stay in business. Especially not in this environment where debt has become very expensive and the market is ridding itself of money losing and risky investments.

The only hope AMD has is to deliver a victory in their CPU division similar to what ATI has just done to Nvidia (e.g., a GPU architecture that is significantly cheaper to manufacture and offers vastly superior performance). They have to come out with a processor that is CHEAPER TO MANUFACTURE and offers SUPERIOR PERFORMANCE to Nehalem, and they have to do it within the year. Otherwise the CEO will be forced to resign (he's promised yet not delivered on turning around the company, Bobcat and other CPU designs continue not impress) and the company will be sold at a 'firesale' to IBM or Samsung.
sure, over the last year they've reported profit loss, but they also reported a slight increase in their market share as well . . .

IMO, and considering how much AMD has branched out over the last 8 months, I think they've been trying to terminate any major debts that they have . . . which would be a smart move on their part.


also, IIRC, it doesn't cost AMD too much to manufacturer the Phenoms . . . what bit them in the ass, though, was a manufacturing defect that was causing dead cores and another issue with the TLB and L3 cache that caused AMD to stall the Phenoms initial launch, and push motherboard manufacturers to release BIOS updates to address that issue. By the time the Phenoms were finally ready to roll, coupled with the poor reviews they recieved, they just haven't sold all that well.


But, they say bad things come in sets of 3, eh?

Judging by the results of the Denreb engineering samples, it appears that AMD might finally have a CPU that boht OEMs and retail consumers would be very happy with.

Give AMD some time is all I'm saying, they're just in a slump still - every major company will go through a really bad period sooner or later. If AMD was to be finished off, it would've happend a while ago.

The fact that they've survived in a slump for this long, coupled with the fact that they've been able to acquire/merge with the second largest GPU manufacturer, and also branch out into more areas of the tech industry, says to me that they're not going anywhere anytime soon.
Posted on Reply
#48
Unregistered
TheMailMan78This is why I invested about 18gs in them a month ago.
18gs damn thats alot. i read once in a magazine my dad showed me of an example of buying $100 worth of stock in some large enterprize i think some airline or somthing and that $100 was turned into over 1million after a few decades.
Posted on Edit | Reply
#50
TheMailMan78
Big Member
quasar92318gs damn thats alot. i read once in a magazine my dad showed me of an example of buying $100 worth of stock in some large enterprize i think some airline or somthing and that $100 was turned into over 1million after a few decades.
Yeah but thats rare and assuming nothing happens to the company. I would have killed myself if I had that kind of investment in AA after 9/11. I do what I can to stay out of things that have to do with the safety of people. On the other hand Iv owned stock in a certain manufacture of firearms since the days of Clinton and since the start of these wars Iv been making a good chunk of change:rockout:
I love supply and demand!
Posted on Reply
Add your own comment
Nov 21st, 2024 11:02 EST change timezone

New Forum Posts

Popular Reviews

Controversial News Posts