AMD Borrowing $$ to Stay A Float??

i love the abundant quotes and links that article gives to back up what it says.

Sounds like they need to go to a good credit counselling service. You know what they say... "You can't solve money problems with money."

I'm not a financial wiz or anything but I would think that if AMD was really that well off they would not have to borrow. You say intel was 2.1 billion in debt in 2005, did they have enough $$ in the bank to cover that? If so, then would it be save to say that amd currently has more $$ in the bank to cover all there debt as well?

Its not how it works. Even if company (AMD, Intel, etc) have money in bank, its good to get additional loans with low interest rates to cover long term investments. For example, countries or even cities where Fab is build, are offering to cover part of Fab cost, lends loads of money with low interest, etc. Why they do that? Because Fab means thousands of work places for local people, millions payed in taxes, etc. It works well for both sides.

Well regardless of painting a nice picture for AMD, IMO Analysts still seem to be concerned over AMD current financial situation of high spending. I think it becomes more of a concern when your high spending funds are coming by way of loans. But then again this is just spectulation from a non financial wiz :?

"Analysts at Goldman cut AMD over concerns about higher spending, a weak price environment for PC chips, and increased competition from its larger rival Intel Corp.

AMD is plowing more money into its factories and absorbing the costs of its $5.4 billion purchase of ATI Technologies Inc. completed last October. "

http://www.marketwatch.com/news/st [...] TNMostRead

I'm not a financial wiz or anything but I would think that if AMD was really that well off they would not have to borrow. You say intel was 2.1 billion in debt in 2005, did they have enough $$ in the bank to cover that? If so, then would it be save to say that amd currently has more $$ in the bank to cover all there debt as well?

Stupid people like yourself should not post when a topic that you clearly have no idea what you are talking about.


1. Banks do not loan companies or individuals who can not afford the repayment of the loan, Banks evaluate your assets, and current balance then decide whether to put the loan throgh or not, clearly, in this case, AMD is financially strong to be approved.

If yourself walking into a bank and ask the manager to borrow $2.1bn you will be the biggest laughing stoke in 2007 (which you and the author of this topic already are)

2. Taking a loan does not indicate that a company is financially creppled, it is called an INVESTMENT, it is the only wise and smart move.

Explained in Detail: AMD borrows money from the Bank, the Bank got the money from their customers, charging AMD at an interest rate. Therefore, AMD is using some1 else's money to build their Fab rather than their own in Addition with the interest rate, In the end, AMD gets its Fab 36 build, their bank account balance is un-touched, and they start the re-payment to the bank once the Fab 36 start making money. After a few years, when the loan re-payment is finished, the Fab 36 belongs to AMD, their Asset value increase by $2.1bn. with that their share value will also increase 8)

Same as Intel or companies that expending and developing.

Bank are not fools, they do NOT loan out money to a Limited or Corporate Company that is protected by law after bank ruppcy and can not afford or assets not beyond the loan Value. !!!!!!!!!!!!!

Looking at your knownlege, nevermind $2.1bn in a few years, you hardly manage $21000 in a few years.

Dear Lord... i saw this and just had to register here because of how daft this topic is... the money isnt to keep "AMD Afloat" its for the financing of the new future technologies lab that opened on December 22nd.

see here

http://www.amd.com/gb-uk/Corporate [...] 33,00.html

as for the amount they borrowed... its peanuts. AMD turnover matches that loan amount every 6 months and as the loan is long term and AMD`s market share in the business sector is growing hugely despite Core2 this loan amount is small frys compared to the overall picture which you will find here:

http://www.hexus.net/content/item.php?item=7004

the key to it all is in the paragraphs entitled Look ahead, should explain a few things for some of you. for the rest of us we knew it already

the basic principle is AMD needed to set up new labs to ensure it could supply its new market to the likes of dell after Intel got caught manipulating the CPU sector by making suppliers like dell and HP sign exclusivety deals to only ship Intel products and in return gave them massive discounts on intel CPU`s

well, no more. AMD may not be the fastest CPU in town any longer but they are the cheapest and thats why they are making such good progress in the business world which is worth far more money than the performance sector. but as youl see, K8L will pretty much level the playing field.


And as for the inquirer, you should ALL know by now, that site is nothing short of a trashy generic broadsheet, sensationalises most things. in future when your reading something by them, have a large bucket of salt to hand as i promise you youl always need it.

Good grief, apparently you have absolutely no idea of how big business works.
This is a positive sign, for the AMD camp, not a problem.

tanker,

I see it as a positive thing if AMD keeps making money. Investing in your business is one of the best things a business can do if they can afford the cost of said investment.

So, as long as AMD can afford to pay the loan, then it is a good thing. The only way the loan would be bad, is if the default on the loan. Even if companies can afford to buy most things outright, they, in most cases, spend other peoples money, and keep capital in the bank for situations when it is needed.

But, simply trying to say that AMD is in trouble because they took out a loan is, well, uninformed. I won't blame it on the OP, but the Inquirer is a trash site.

I thought AMD's biggest problem is that they cannot make enough chips. I believe securing orders from the likes of Dell made it a smart move to borrow money to pay for a new factory sooner than waiting till they had the cash later.

I'm not a financial wiz or anything but I would think that if AMD was really that well off they would not have to borrow. You say intel was 2.1 billion in debt in 2005, did they have enough $$ in the bank to cover that? If so, then would it be save to say that amd currently has more $$ in the bank to cover all there debt as well?

Stupid people like yourself should not post when a topic that you clearly have no idea what you are talking about.


1. Banks do not loan companies or individuals who can not afford the repayment of the loan, Banks evaluate your assets, and current balance then decide whether to put the loan throgh or not, clearly, in this case, AMD is financially strong to be approved.

If yourself walking into a bank and ask the manager to borrow $2.1bn you will be the biggest laughing stoke in 2007 (which you and the author of this topic already are)

2. Taking a loan does not indicate that a company is financially creppled, it is called an INVESTMENT, it is the only wise and smart move.

Explained in Detail: AMD borrows money from the Bank, the Bank got the money from their customers, charging AMD at an interest rate. Therefore, AMD is using some1 else's money to build their Fab rather than their own in Addition with the interest rate, In the end, AMD gets its Fab 36 build, their bank account balance is un-touched, and they start the re-payment to the bank once the Fab 36 start making money. After a few years, when the loan re-payment is finished, the Fab 36 belongs to AMD, their Asset value increase by $2.1bn. with that their share value will also increase 8)

Same as Intel or companies that expending and developing.

Bank are not fools, they do NOT loan out money to a Limited or Corporate Company that is protected by law after bank ruppcy and can not afford or assets not beyond the loan Value. !!!!!!!!!!!!!

Looking at your knownlege, nevermind $2.1bn in a few years, you hardly manage $21000 in a few years.

I couldn't have said it better than that.
Excellent post!

Fanboy alert :!: :!: :!:

SEE POST BEFORE THIS ONE

I guess you have not paid much attention to everything else Ycon posts. It tends to be about par with all the other idiots like Sharikou and 9inch(whatever his name was).

wes

I agree with you, but learn to spell please. Seeing "laughing stoke, creppled, and bank ruppcy" ruined this post.

You sound like AMD wasted its yearly salary in bars with hookers and nothing is left for the remaining 11 months

Off topic, and not to hijack this thread... But I for one am appalled at the common mistakes that are made by 'english as a first language' members. Loose vs lose... quite vs quiet...

I've seen better grammer from people that I know are not native english speakers.

End of rant.

Full ramping of Fab 36 requires money.
Rebuilding Fab 38 requires money.
Buliding a new Fab in New York requires money.

I don't see any point that AMD is in trouble unless it cannot repay the loan.

ATi makes its own chipsets... never heard of R200 R300 and R3200 ??

The main advantage for AMD will come in 2008 when the integrated GPU/CPU`s start to ship, mainly for economy markets.

Your Americans, none of you speak proper English full stop . For example, there is no such metal on the periodic table as "aluminum" its Aluminium... and its colour NOT the lazy option you all use which is color...


p.s. you miss spelled Grammar which is never a good thing when your trying to make a point about it...

p.p.s Yes indeed i am from England.

oh you just have to explain that lucy as it makes less sense than former House Representative Mark Foley in a female strip club. Intel have nothing to do with AMD`s finances, there a totally separate RIVAL company (who coincidentally should have every office burn to the ground preferably with all of the board members from the last 20 years inside them at the time...)

LMAO

That one simple statement right there negates anything of intelligence you might have said, previously or in the future. All you are is another AMD fanboy and therefore worthy of nothing but heckling, abuse, and being ignored.

To dust off my usual question...Do you use Windows?

This is an incorrect statement. AMD has offered chipsets. 950 for Athlon, 8000/8131 for Opteron. The 8000 chipset still turns up in server mobos. Before nVidia and BroadCom, etc it was the only Opteron chipset.

I've stated this before.

AMD's business proposition is one of growth aggressive in comparison to the current market trends. The purchase of ATI assisted with this, because the turnover from ATI that they bought exceeds the amount of interest they have to repay on the loans they took to buy it.

They also have spare revenue from the deal that they can now use to borrow more to expand. They have also got far more revenue from their deal with Dell to fund this. Note that it is the increased revenue that is important, not the reduced profit margin.

Some people are obviously not aware of the financial instruments used to fund the capital for a growing business. I am UK based, but the US market is broadly similar in this respect. AMD + ATI has proved to be a more financially stable company than merely ATI. The new company can therefore borrow money cheaper than in the past, i.e. it could borrow money to simply repay other debts and restructure cheaper if it wanted to. I suspect that part of the condition of the new loan is they didn't do this and instead got excellent terms on the new deal.

Of course, it is highly preferable to use your own capital to fund development if you can, but not many companies are in that fortunate position. You should only worry is AMD is NOT able to borrow to fund development and expansion.

I wouldn't worry too much about it...

In business a common practice is to use something called a Balanced Scorecard, for which this would be a good demonstration.

In short you balance stuff like Working Capital versus Assets. In this case, AMD increased their Working Capital by increasing their debt, and converted that capital to assets.

When this is reviewed on the financial scorecard, the company's value only decreases by the difference between the size of the loan and the value of the new asset.

Add the projected revenue to the scorecard over a time span, and I'm sure the revenue will outweigh the difference between the size of the loan and the value the new asset (fab) will provide.

Ultimately, a balanced scorecard is just a way to demonstrate a mathematical equation in terms business individuals can understand, and ultimately this same math is used to value the company, and its stock.

A simplified example:

Scorecard weight / Company Value = (Cost of Loan + Size of Asset) + projected revenue

A lot of other factors are considered as well, including customer impact, company image, etc. Stuff math equations don't represent well, which is why a scorecard is used.


So in other words, taking out a loan is not a cause for concern because it's adding to their assets, and doesn't impact the company value greatly. As long as the fab can produce revenue, it's actually a very good sign for AMD. If they were indeed taking a loan to "Stay afloat," (i.e. Meet their operating expenses), there would be cause for concern.

the correct term would be used to make mobo chipsets with the exception of the server side. It is a well known fact they stopped making desktop solutions a while ago that is why all you see is VIA, Nvidia, ATI, etc.

That one simple statement right there negates anything of intelligence you might have said, previously or in the future. All you are is another AMD fanboy and therefore worthy of nothing but heckling, abuse, and being ignored.

To dust off my usual question...Do you use Windows?

Your not quite understanding me it seems... your implying that i am putting forward an unbiased opinion when i am doing nothing of the sort. Theres nothing wrong with being a fan of a particular company provided your not trying to hide it in thinly vailed attacks on a competitors product, this i have not done.

I have nothing against Intel CPU`s they are very good chips, i am just against Intel and for good reason. You imply i am for some form of product disparity where none exists... very strange.

as for windows, yes i use it, as well as Ubuntu + XGL GUI and an old G4 due to the fact that ive been a system tech for the last ten years.