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AMD asks to double common stock to 1.5 billion shares

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March 3, 2007 3:32:15 PM

The good ole Inquirer at it again, interesting move by AMD though, if the story is true. What do you guys think of this move by AMD?


Inquirer --> AMD Shares
March 3, 2007 3:34:45 PM

Quote:
The good ole Inquirer at it again, interesting move by AMD though, if the story is true. What do you guys think of this move by AMD?
Inquirer --> AMD Shares


The best that AMD can do to raise fund for agressive expansion.
March 3, 2007 4:03:25 PM

I did some digging and found the actual filing on the SEC website.

AMD SEC filing

To all of you that are currently holding AMD stock: I hope you like it with no vaseline as they dilute your equity by 50%.

Edit: Of course the current shareholders have to approve this first....
March 3, 2007 4:12:39 PM

I always viewed issuance of new stock as a rob Peter to pay Paul tactic.

To those owning the stock:

what this means to you is that your stake in AMD is about to get cut in half with respect to the overall percentage of the company that you own.

Simple math states that if AMD currently has a market cap of 10billion and then the number of shares doubles, the price of each share has to get cut in half to maintain the same market cap of 10 billion.

If this passes, I project a new low of $4 to $5 per share at the bottom this summer.
March 3, 2007 4:25:52 PM

Sharidouche, I don't believe even takes himself seriously. I am 99% certain he just tries to keep the hits to his site coming. Seems the best way for him to do this is to be just as ridiculous as humanly possible.

Deep down I don't want to believe a fellow member of the human race could really be this stupid.
March 3, 2007 6:59:49 PM

This really worries me - if they double the # of shares the price will be $7 if amd has problems they could get delisted if their stock gets too low.
March 3, 2007 7:58:33 PM

Quote:
The upside is that the stock could instantly start climbing.


More shares outstanding means it will take a proportionally greater amount of buying or selling to move the price up or down. I guess we will find out Monday what the analysts and mutual funds think about this.

Are you thinking this is going to be a 2 for 1 stock split? (where all holders get an additional share for every share held and the price gets cut in half)?
March 3, 2007 8:19:58 PM

I see this as VERY good news.
Usually if a company is doing badly (like stock < $4), the company will try to merge shares to keep it from being de-listed.
March 3, 2007 8:38:33 PM

Quote:
The upside is that the stock could instantly start climbing.


Verndewd, there is no upside here.... if you have AMD stock, put in the sell order first thing monday morning. AMD is about to dilute itself 50%, and begin dumping that extra stock into the market.... this has no other affect but to drive the price down.

Listen to Jack or be prepared to lose your ass. This level of dilution is very bad for existing stock holders.
March 3, 2007 9:09:42 PM

Three things that have been posted recently...

1. AMD talks about Intel cherrypicking benchmarks, then cherrypicks data. And says in the same breath that they are 'honest'.

2. Suddenly there's a rumour of a Monday launch of Barcelona.

3. Now there's an SEC filing for a doubling of their shares...

Draw your own conclusion, but mine is that I am glad I don't own any AMD shares.
March 3, 2007 9:17:43 PM

Quote:
On the sec filing they issued a vote methodology. And I am thinking the SEC may not like the theft of 3.5 billion in public value.


I agree completely and I suspect the mutual funds will be dumping AMD hand over fist Monday morning.
March 3, 2007 9:52:37 PM

Too bad the market price will most likely have fully adjusted to this filing already by the time your shares get on the market. Any intro finance class will tell you that you can't beat the market based on information in the public domain, meaning the really public domain like the SEC. You've got MAYBE 20 mins, tops, before the market has adjusted to information like this.

What you really should have done is sold at the first C2D benches, and buy again immediately after this measure is approved - IF you still believe there is an upside to the stock.

But that's the information that really matters - that last bit. Dumping your shares now if you think there is an upside to the stock is most likely NOT a good move.[/u]
March 3, 2007 9:55:06 PM

Quote:
Nope, bought 2000 shares in Jun of 05 (~ 15 bucks) for 30000 cost basis, sold in March of 06 for ~ 35 bucks, at 70000, for a nifty little short term capital gains of 40000, after tax about 25000 in the bank.

A general rule on investing ---- never look at 'what I could a made' and think 'I lost money'.... this is the way Baron thinks...


Very nice :)  Not knowing your financial situation, this might be peanuts or it might not - still very nice to see 100% gain in a year. I just wish I had the balls to put $30,000 of my own money into a single stock :roll:
March 3, 2007 10:17:39 PM

Quote:
uhhh I think you are assuming alot for what I have said.


Was just in response to people saying dump the stock immediately monday morning

Quote:
do well.... not rich, not poor. In a funny sorta way, I have taken about 1/2 of this amount of money and dumped it into new toys over the past 8 months.... 2 E6700, 1 X6800, a QX6700, a 8800 GTX and a 24" monitor.


I finally went got a 24inch 1920x1200 and goddamn, how did I ever survive without it. But now I think, what a shame to have all these awesome pixels and no 8800GTX.. and my wallet's telling me there's barely enough left for a GTS.. sigh 8)
March 3, 2007 10:25:13 PM

Quote:

Not the wisest move,maybe but you could do it as a damage control move.


Well that was my point, it's not a damage control move, unless you think there will be further bad news ahead. By the time you dump your stock, market will have adjusted to this information meaning you will be going out at the lowest point if you think, for example, Barcelona will rock or whatever.
March 3, 2007 10:29:28 PM

Quote:
I see this as VERY good news.
Usually if a company is doing badly (like stock < $4), the company will try to merge shares to keep it from being de-listed.


This is not a stock split --- stock splits are good news as they are signs that a company expects to perform better over the long term. This is asking the shareholders to lower the equity value of the existing stock so AMD can sell more of itself as a means to raise much needed capital this is done because one is running out of money.

Usually, if a company is doing badly they issue more stock to raise operating cash.... this is exactly what AMD is doing.

Monday, close of the stock market, AMD will be down in the 13 range, maybe less.... the market is going to take this a bad sign.

Too bad, I thought this was a stock split.
I thought AMD had better engineers than Nvidia. So, what could the problem be?
March 3, 2007 10:55:16 PM

Quote:
uhhh I think you are assuming alot for what I have said.


Was just in response to people saying dump the stock immediately monday morning

Quote:
do well.... not rich, not poor. In a funny sorta way, I have taken about 1/2 of this amount of money and dumped it into new toys over the past 8 months.... 2 E6700, 1 X6800, a QX6700, a 8800 GTX and a 24" monitor.


I finally went got a 24inch 1920x1200 and goddamn, how did I ever survive without it. But now I think, what a shame to have all these awesome pixels and no 8800GTX.. and my wallet's telling me there's barely enough left for a GTS.. sigh 8)

At Christmas I told my wife she was buying me a new monitor for my office. What she didn't know was that it was a 30 inch Dell monitor. When it showed up she was a little miffed. But I agree it's hard now to look at a 19 inch after using the 30.
March 4, 2007 1:14:09 AM

Quote:

Not the wisest move,maybe but you could do it as a damage control move.


Well that was my point, it's not a damage control move, unless you think there will be further bad news ahead. By the time you dump your stock, market will have adjusted to this information meaning you will be going out at the lowest point if you think, for example, Barcelona will rock or whatever.

essentially we are saying the same thing. look back at what I typed as an "If then" factor on performance of upcoming releases.
Poor performance +split stock turns into damage control dumping half your shares.

Great performance+split stock=buying in at a great price to increase your shares.

Verndewed.... this is not a split :)  .... when the 750 mill goes to 1.5 billion, existing shareholders will not get double their current shares.

A person owning 100 shares of AMD stock with 750 million shares will own 100 shares after AMD dilutes to 1.5 Billion shares.

In a split, a persion owning 100 shares at 10 bucks of company XYZ will own 200 shares at 5 bucks once company XYZ splits.

AMD is asking their shareholders to give over 1/2 of their equity.

I beg to differ on the bet of a dollar :wink: I bet one dollar its a split. :wink:

Why would a share owner give amd half their equity?I am sorry jack but no one in their right mind would do that.From your buy in ,they would be asking you for 15k as a gift.No I will stick with my position.SPLIT.

Vern, I have to agree with Jack on this. A split takes existing shares, and divides the individual share value by half while multiplying the total number of shares by 2 for a net sum zero change in any given stockholders portfolio value.

The real question to this move is why?

There are a bunch of possible reasons why. Try this one on for size. This is just one option, and not even my opinion. There are no facts to back this up, only that it exists as a possibility.

Protection.

It may be that by doubling the number of available stocks while reducing the cost, AMD is hoping to dillute current holders percentages while creating a rush on new stocks at lower proces thereby spreading total ownership and reducing the risk of a takeover.

We've all seen the take over rumour posts. Some of us are fairly skeptical, while others see the circumstances as at least presenting the opportunity. Some even see the situation as favorable. After the ATI buyout last year, when so many of us (myself included) said "no way it will happen", I would venture that at least some of us are more....open(?) to the possibility of an AMD takeover. I dont know, but among the possibilities, a takeover is an option regardless of its probability, and AMD attempting to protect itself by 'thickening' the stock numbers is also a possibility, even if not a realistic one.

Of course, Hector and the rest of the 'gang' could simply be trying to get their own mitts on more shares just for personal monetary gain, or trying get more cash for the company. Who knows with that bunch?
March 4, 2007 2:07:33 AM

This is...wow...I wasnt realy expecting this,as recently I have put a rather large sum into buying AMD stock, and loseing half of that means my wife will be a bit mad...ahhh well. I can se several reasons for doing this, and all of them are legal,as the share holders will be required to vote on it, and its totaly legal to give your money away. It will raise alot of money for AMD, who neds it desperatly, it will make a takeover by anyone, though im leaning towards Nvidia on this, much harder sence it spreads ownership around, and in the end, if worse comes to worse, then it lessens the impact of loss, if the company goes bankrupt, although my thoughts on this are that Intel wont allow AMD to disappear unles Nvidia takes there place. As a shareholder, as much as its gunna hurt, and im thinking there aint enough vasaline in the world to make it not, that ill vote for this measure
March 4, 2007 2:12:19 AM

The price depends on what they're able to get new people coming in to pay. To be honest, this does give more credence to the private equity buyout, as it is entirely possible that AMD has institutional purchase commitment at a level that they think would make it worthwhile. It could also, to use the expression, grease the wheels for a private equity partner to come in and snap up a lot of those new shares and gain an impressive foothold into the company for less than a full-on acquisition would cost. (For those wondering, no, issuance of new stock is not based on a fixed market cap; if approved by the SEC, such actions tend to increase the market cap, although it then makes the stock that much more sensitive to earnings reports... AMD may be wagering on the fact that the new revenue coming in from ATI might be enough to allow them to expand the stock issuance with minimal impact on share price).

I don't see the stock being in complete freefall, but I would probably hold off on buying stock at the moment, as it wouldn't surprise me if it were down to $9-$11 in six months. On the plus side, however, a new issuance of stock might be a good time to get into AMD stock... it doesn't quite have the sizzle of an IPO, but acquiring new AMD stock at $10 wouldn't be a terrible investment, all things considered.
March 4, 2007 2:24:03 AM

this is going to hurt AMD,no matter how you look at it, it makes it look like they are running scared. I also dont see any non tech company stepping in to buy AMD, when there are atleast two companies that have the equity to buy them outright. I dont see IBM wanting to step in and go toe to toe with nvidia and Intel in one swoop...otoh I firmly think that Nvidia wants an x86 license, and would buy AMD to get it, and then sale off ATI to increase cash on hand.
March 4, 2007 2:24:35 AM

Quote:
speculation.stock splits double stock ownership at half the value.

I stand by my assertion.!00% Ill bet you a buck as well but thats it 2dollars is my max bet. :lol: 



Yes, thats exactly what they do.
But this is not what AMD is doing. Its expanding its stock offering, meaning existing share holders portfolios do not expand in number of shares, but do shink in value per share. In short, current stock holders are taking it....in the shorts :wink: :lol:  Meanwhile, AMD will be selling off the new shares.

Again, the question is why?
March 4, 2007 2:29:55 AM

Quote:
This is...wow...I wasnt realy expecting this,as recently I have put a rather large sum into buying AMD stock, and loseing half of that means my wife will be a bit mad...ahhh well. I can se several reasons for doing this, and all of them are legal,as the share holders will be required to vote on it, and its totaly legal to give your money away. It will raise alot of money for AMD, who neds it desperatly, it will make a takeover by anyone, though im leaning towards Nvidia on this, much harder sence it spreads ownership around, and in the end, if worse comes to worse, then it lessens the impact of loss, if the company goes bankrupt, although my thoughts on this are that Intel wont allow AMD to disappear unles Nvidia takes there place. As a shareholder, as much as its gunna hurt, and im thinking there aint enough vasaline in the world to make it not, that ill vote for this measure


I dont think anyone was expecting this. All the reasons you list are viable, the question is: Which reason, or combination of reasons prompted AMD to do this and what does it say about their financial state?
March 4, 2007 2:43:44 AM

AMD has been struggleing with cash isues for a long time now...the purchase of ATI made it worse....and the thrashing of k8 by conroe was a sucker punch from right field that they werent expecting...its a formulae for disaster...at the time buying ati was smart..in hindsight it was stupid...i wish i could always see into the future...but im puting nvidia stock on my plans of purchase for monday morning
March 4, 2007 2:55:42 AM

Quote:
AMD has been struggleing with cash isues for a long time now...the purchase of ATI made it worse....and the thrashing of k8 by conroe was a sucker punch from right field that they werent expecting...its a formulae for disaster...at the time buying ati was smart..in hindsight it was stupid...i wish i could always see into the future...but im puting nvidia stock on my plans of purchase for monday morning


Yup. But at the same time, while making new offerings could improve the cash situation, it could be interpreted as a sign of desperation. Or not. Or a lot of other things. I guess we'll have to wait and see.
March 4, 2007 3:18:02 AM

This IS a move of desperation, and that perception will drive prices even lower than the 50% hit it's already going to take. AMD has not much choice, really, since this is pretty much the only way to a) not be bought out and b) make more cash. Unless they really do have private equity lined in which case the situation becomes even more interesting.

Vern, I'll add in another buck to the pot for your bet :)  No way this is a stock split. Stock splits usually happen because the company perceives that the stock price has gone too high and they want to lower the entry level to buying and selling the stock. There are several other reasons but because, as someone has pointed out, stock splits are zero-sum, they are used mainly for singalling purposes.

Guess we'll see on Monday :D 
March 4, 2007 3:35:13 AM

I agree that its definitely not a split as well. The 10k filing would have listed it specifically as a split. Companies typically only split their stock after a good run up so that the lower share price will attract more buyers.
March 4, 2007 4:13:15 AM

Quote:
Analysts are going to need to take all their EPS and 1/2 that number, in this regard no big deal except for the psychological effect.


Well, speaking about psychological effect, this means that loss per share will be decreased from 0.34 to 0.17 :) 

Mirek
March 4, 2007 6:09:22 AM

Quote:
This is...wow...I wasnt realy expecting this,as recently I have put a rather large sum into buying AMD stock, and loseing half of that means my wife will be a bit mad...ahhh well. I can se several reasons for doing this, and all of them are legal,as the share holders will be required to vote on it, and its totaly legal to give your money away. It will raise alot of money for AMD, who neds it desperatly, it will make a takeover by anyone, though im leaning towards Nvidia on this, much harder sence it spreads ownership around, and in the end, if worse comes to worse, then it lessens the impact of loss, if the company goes bankrupt, although my thoughts on this are that Intel wont allow AMD to disappear unles Nvidia takes there place. As a shareholder, as much as its gunna hurt, and im thinking there aint enough vasaline in the world to make it not, that ill vote for this measure


If Nvidia bought out AMD then they would have to sell off ATi, otherwise they would have a monopoly in the consumer graphics card market.

True?
March 4, 2007 6:32:49 AM

Quote:
If Nvidia bought out AMD then they would have to sell off ATi, otherwise they would have a monopoly in the consumer graphics card market.

True?


I don't think FTC will approve the buyout.

Also, AMD is nearly as large as nVidia. It is too difficult for nVidia to "swallow" AMD :wink:
March 4, 2007 9:23:32 AM

I thought so.

I honestly can't believe that people think AMD are going anywhere soon just because they haven't got a DX10 8800 equaling/beating card. From what I remember the enthusiasts (i.e. us) make up less than 5% of AMD, Nvidia and Intel's market. (Source: PCPowerplay, Australia's most widely read PC gaming magazine).

I will admit AMD is doing it tougher than anyone would like (except Intel fanboys); it would be folly not to. But they're still competitive in the mid to low range, which is where the majority of sales are.
March 4, 2007 1:03:44 PM

we discused this in another thread. I think both IBM<Intel, and private investors would buy ATI, if Nvidia bought out AMD. Also, while AMD is infact a bit larger then Nvidia, AMD has a history of strugleing for cash...Nvidia on the other hand, has never lost cash,they simply go up, even when they released the FX cards, they increased marketshare, and net worth. They have also had two major loans as a company, and both were paid in less then half the time they were given to pay them back. Aa it stands right now, AMDs net value, is very near their net debt, Nvidia could almost trade cash in hand, and buy AMD out of debt. Also, a friend I have, who works as a procesor at BoA, whom issued the startuploan to Nvidia when they incorporated, told me Nvidia has been in talks with them to take a major loan, to the sum of almost 2 thirds of their total net worth, to help them expand into new markets. If you look, Sis,Intel,AMD,via, and Nvidia are all listed as active graphic chip makers. Even if Nvidia didnt spinoff ATI, which would be dumb becouse of the los of cash it would bring, that would still mean, AMD had much les then half of the total graphic market share.
If you look further, Nvidia has been rumored to be designed an x86 chip...only no way to sale it, as they dont have a license. Now they could buy Via...but somehow I doubt they would want Via, if they could have AMD, and the AMD fabs, for just a bit more
March 4, 2007 2:06:40 PM

from the yahoo message board:


Whenever a company says (in this case AMD):

"Our Board of Directors believes that it is in the best interests of the stockholders"

YOU BETTER RUN AWAY FAST, trouble coming. The light at the end of the tunnel is the light of the locomotive that will run you over.
Will flatten you.
March 4, 2007 2:29:33 PM

Quote:
The good ole Inquirer at it again, interesting move by AMD though, if the story is true. What do you guys think of this move by AMD?


Inquirer --> AMD Shares


Given the recent rumors about a takeover, this looks like someone is desperately trying to prevent that or even playing with a possible aquisitor. It´s an interesting move.
March 4, 2007 4:37:14 PM

This doesnt make it easier for AMD to be taken over,unless they plan on breaking AMD up and saleing them off, becouse what this does, is make the diffrent parts od AMD more valueable then the sum of them all togethor.
March 4, 2007 5:31:56 PM

Quote:

This is intuitive.... though hard to imagine at the moment, it would not be illogical.

The Inq floated a rumor that AMD/nVidia were in merger talks prior to the ATI talks/deal. If this were true, then something happened to break those down -- the Inq says it is because nVidia CEO Huang wanted to be the top dog.... frankly, as you point out, this may not have been a bad thing. GPU business is lower margin than CPU, but nVidia has made it possible to be very profitable.

On the flip side, I see nVidia going after an x86 product as being very real. They have one stumbling block to be competitive --- they don't have a fab :)  .... this could change with a buyout of AMD for example. Speculation, but not bad speculation.


But nVidia is only a littie bit larger than AMD 8O
March 4, 2007 5:55:47 PM

Quote:
from the yahoo message board:


Whenever a company says (in this case AMD):

"Our Board of Directors believes that it is in the best interests of the stockholders"

YOU BETTER RUN AWAY FAST, trouble coming. The light at the end of the tunnel is the light of the locomotive that will run you over.
Will flatten you.


Wow --- jumped over to the Yahoo boards and skimmed through, they are crucifying AMD over there.....

Funny when it comes to money/financials, it is always to the extremes --either the sky is falling and the world is about to end or it's the sky is the limit and nothing in the world can stop it.

This might be a good time to sell AMD shares and buy Intel. Two reasons why this might be a good idea...Intel is at a really good price right now, and if they deliver a good Q1 earnings report, the stock could jump nicely. Let's face it, everything that Intel has been hammered on by the investors over the last few quarters can only improve this time around...pure speculation though. :wink:
March 4, 2007 6:04:29 PM

AMD was not that much larger then ATI,AMSOUTH was larger then regions, and regions bought them out, a smaller, more aggressive,richer company can purchase a larger one. AMD has had very very few quarters that were profit, look at Nvidias record, plus they have avery good credit rateing, and a very nice record with bank of america. Also Nvidia has almost enough cash on hand, to pay all of AMDs outstanding debts, and if they found someone to buy the ATI division from them at the time of purchase, it would make it even easier...and SiS,Via,Intel, and Matrox all have cash on hand to be able to buy ATI for its value...and all have a reason to do so. Outside of private groups, theres only a few companys that can afford to injest AMD, even fewer could handle AMDs problems ontop of their own, of those that are left, you have Intel, IBM, and Nvidia, Intel would never get approval, IBM can afford to jump into competition with Intel and Nvidia in new markets all at once. On the other hand, you have Nvidia...an aggresive company, it shows solid profits, and a CEO, huang, who is bold,smart, and a leader on the move. He has been pushing Nvidia into new markets at a steady pace, and has yet to lose step. Everyone knows Nvidia wants part of the x86 pie, but cant get Intel and AMD to let them have a peice, Huang has shown before that he isnt scared to take risks if the end justifies the means...but it is inded only speculation,based on rumors
March 4, 2007 6:15:27 PM

Quote:
[

Wow --- jumped over to the Yahoo boards and skimmed through, they are crucifying AMD over there.....

Funny when it comes to money/financials, it is always to the extremes --either the sky is falling and the world is about to end or it's the sky is the limit and nothing in the world can stop it.


Exactly right!

And short term trading of stocks is often like a pyramid scheme for exactly that reason. The bet ends when the unlucky last buyers near the top are left holding the bag from the "momentum" stock. It all works exactly the same way inversely in the downward momentum. Some unlucky folks somewhere will sell near the bottom, wherever it is, and will regret that.

This is why anyone who isn't a professional trader should instead follow the principles of Warren Buffett for example, IMO.

I do generally, and also I'm very diverse. Both Intel and AMD together are less than 1.5% of my portfolio back when both where higher. In a way, I'm betting that Paul O. won't be able to maintain a price war without getting the boot, and my time horizon is actually 15 years, during which time I expect a lot of chips to be sold in Asia.
March 4, 2007 6:28:31 PM

hmmmm, this is always hard to judge, but Intels board sems to love Mr. Otellini, they are spreading out into new markets, growing, increaseing sales, regaining market share, cutting out old stock, all while showing a decent profit margin. I had the chance to meet Mr. Otellini in January of 03, and even then, he was aglow with his vision of Intel. He has been with Intel sence the early 70s, he has studied at the right hand of some of the greatest busines minds in the world, and his goal wasnt to outprofit AMD, becouse he said any company 10x the size as its closest competitor can make more, he said his goal was the make Intel a faster paced company, trim it, until they could respond to the curent and future markets quickly, and without a total restructure. His speach to Intel, when he took the helm, said many of the same things. He didnt promise a return to the profits of the early 90s, he promised to make then a new Intel for a new world, and ya know what? Hes done it. Intel is leaner, more agressive, faster to respond, and more efficiant then they have ever been. Even with the price war, they are on an increase across the line, it could be better with higher prices maybe, but all the board is seeing, is profits, less need to floor the market with advertisements, and the income they will soon be getting from the medical section. M. Otellini isnt going anywhere anytime soon, he is what Intel needed, and they know it.
March 4, 2007 6:33:29 PM

yeah, good points. The CEOs of big companies (S&P500 types) that lost their jobs in the last couple of years even when the company was well run and profitable were said to be kicked out because the stock price went nowhere.

I bet Paul O. has a lot of room to play, but also that he's used up some part of it now. It's the big institutional shareholders that can apply pressure I think.
March 4, 2007 6:41:27 PM

I dont think hes done anything but gain ground. Most of the big investors in Intel, are part of Intel, the next largest shareholder outside the board, is BGI, and they are firmly behind M. Otellini. Granted they are in for the long haul, haveing owned their stake of Intel sence the 80s, but they hold the proxt vote of many others, and even more Intel investers listen when they speak. Intel is rare in that the majority of its large shareholders have been with te company for many years,some even decades. They have sen Intel at its early 90s height, to the bottom after the silicone valley boom, and Intel has always survived. Up and down, but they survive and prosper. Unles Otellini messes up by the numbers, he will be at the helm for a while yet, hes a young man, and just aggresive enough to keep Intel on the track he wants
March 4, 2007 6:56:32 PM

Gentlemen:

This is neither a stock split nor dilution of equity. The key phrase in the proxy was "authorization". This means they are asking stockholders to allow the issuance of x number of shares. They could concievably issue them to the existing shareholders, on a 1 to 1 basis and turn this into a stock split. Or they could issue them at a given price (determined by them and the brokerage firms they use to do the offering). Depending on the offering price, this may or may not be dilutive, as the company takes in large quantities of cash that raises shareholder equity, although it still may lower equity/share.

If they choose to hold onto these shares in the corporate treasury, it does nothing to the value of the outstanding shares.

While a doubling of authorized shares is huge, many companies ask for increases in authorized shares to pay for stock options, profit sharing, ESOP's etc.

Therefore, simply authorizing shares does nothing. It's not until they are issued and tradable that they will affect price/share, earnings/share, equity/share and all the other xx/share ratio's investors and analysts use to evaluate value.

I think your speculations, though, are right on the money in that AMD is essentially going to its shareholders "hat in hand" so to speak. At least they are asking!
March 4, 2007 6:59:00 PM

nice points lance.
March 4, 2007 7:13:07 PM

True, but none of us argued otherwise...what we said was, to everyone, this looks like AMD is in trouble. Its the sums that total more then the parts so to speak. If Barcelona was r600 were as great as AMD says,then they wouldnt wait to ramp, they would sale what they have, to bring in cash, they would not plan on eeding such drastic measures. Even if everyone is wrong, and it is nothing major, investors wont see it that way, nor will analysts. If you are right, then AMD is hitting bullets with hammers by doing this at this moment. It would be much better to release a groundbreaking product, and start to earn income, then do it, so people know you have a fighting chance, not delay,and delay, and then do it
March 4, 2007 7:19:59 PM

Well, perhaps it is their plan to build a new fab in NY state.
March 4, 2007 7:31:07 PM

Quote:
AMD has been struggleing with cash isues for a long time now...the purchase of ATI made it worse....and the thrashing of k8 by conroe was a sucker punch from right field that they werent expecting...its a formulae for disaster...at the time buying ati was smart..in hindsight it was stupid...i wish i could always see into the future...but im puting nvidia stock on my plans of purchase for monday morning


it wasnt a bad move ,As I have railed for so long ,the planning was seriously flawed and now they propose to TAKE value from common stock.

If its not a split,AMD is a thief.and I lose 2 bucks :wink: :lol: 

sell before its an official rip off.

Late again on the conversation. Ok, the last couple weeks I've questioned the sanity of the heads of AMD and wondered if the tech departments were smoking some strange stuff. Of course, Baron then questioned why I had bought any stock at all. But in defense, I first bought last fall when teh new cpu and the R600 were supposed ot come out shortly. They didn't, the stock fell, so I bought some more thinking that in a month or two some hardware would finally come out and the stock would go back up enough to recover my losses. Now this.

Since it has to be put to the stockholders for vote, I know where my vote will go, like, no way. Unfortunately, my few shares don't hold a candle to the big shareholders, should they vote for it. If the stock were to split, than I wouldn't care one way or the other, my valuation remains the same.

But I see that all the company heads are dumping their stock holdings. That means they know something they aren't telling, which might pull charges of insider trading. Can anyone spell Enron? Does anyone remember what happened to those in charge of Enron, including the accountants of the company? maybe there is a note of hope here, as I just checked and found that though the officers sold off some stock, their overall holdings are 10 to 30 times as much as what they sold. But they still took options to buy at much lower prices, which means they expect the price to go lower and that still smacks of insider trading.

Like you say Vern, if its a split, it doesn't matter much, if its not, AMD is playing not just theft, but grand larcony. At the moment, I don't know whether to put in a sell order now and take the losses or gamble that the stock will recover and rise. I know I live in Nevada, a gambling state, but this really tests the nerves.
March 4, 2007 7:32:29 PM

that fab is part of the problem. Fabs are hugely expensive to make and maintain, and AMD doesnt have that kinda cash right now, they need to cancel until they weather this current storm and come close to paying off the diffrent loans they took out
March 4, 2007 7:45:08 PM

I've no doubt they have intelligent people working out these scenarios. One thing they decided as I understand was that they could not go long term at below 20% market share, because it was too much of an R&D disadvantage. Of course, alliance with IBM helps enormously, but Intel's advantages had to be reduced at least some. Also, if you have Dell, HP, Lenovo, etc, as customers, and you come out with a good arch, you just have to be able to make enough chips to make it pay off as it should, with scale vs R&D costs.
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