AMD's Abu Dhabi Deal - From Bad to Worse

[fazers_on_stun]

Since it doesn't seem anybody else has started a thread on this yet...

From http://www.overclockers.com/index.p...=article&id=4297:abu-dhabi-gets-a-better-deal

Essentially, the A.D.ers saved themselves about $200 million and got more Foundry Company for the rest of their money. Guess AMD had no choice but to accept the new conditions. This ought to tell you who the boss is in this new arrangement.

If this "done deal" keeps getting any better for AMD, they may fulfill Sharkook's prediction to "BK by 2Q09"...

 

[roofus]

wow that kind of sucks. as bad as they need money i think this deal has potential to really minimize the control they have over Foundry Company. i wish there was a group of investors just to keep one entity from having them by the short hairs.

 

[turpit]

Just reading about this on Rueters. I was going to start a thread, but since you have.....

When I came home today, I was fully expecting to see the dow down about 200 based on last fridays unemployment report, with Intel losing around 60 cents and AMD gaining 20 cents based on the estimate of a 5000~6000 head layoff at Intel.

Man.....did I sblow that one out my behind......almost 180' out.

The Dow is up almost $300, Intel up 65 cents and AMD down 3 cents.

I have no guestimation for this.....the only thing I can figure is the unfavorable rehash of the Abu deal impacted AMD/Intel

In terms of stock, Mubadala will no longer pay a fixed price for the 58 million shares of AMD, instead paying the lower of the average closing price for the period from 23 Nov to 12 Dec, or the period 20 days prior to execution of the deal....the date of which was not mentioned.

And, instead of the original 30 million warrents, the Abus are now getting 35million warrents.

This is the ugly part, if the mediatards got it right (which is asking a lot of a group of people whose sole purpose in life is to sell advertisning space).....AMD will now only retain 34.2% stake in the deal instead of the original deals 44.4% Unfortunately, the Abus are still only shelling out the original $2.1billion.

As Darth would say....."pray I do not alter it further"

 

[turpit]

wow that kind of sucks. as bad as they need money i think this deal has potential to really minimize the control they have over Foundry Company. i wish there was a group of investors just to keep one entity from having them by the short hairs.

Well, Maybe its time to start the internet "Save AMD stock buyout drive"....Im serious. I wonder how much capitol could be raised out of the US forums? Enough to take 51%? Hmmm.....a 51% stake could get rid of Hector and possibly clip the lines on his golden parachute, cut the PR idots, and re direct the money theyve been wasting their back into AMDs R&D.....let the product speak for itself. Might as well, it always does in the end. With the stocks so low....a ,ow entry mass collective buyout might.....just might be feasible.


I really wonder. Right now their market cap is $1.277 Billion. @ $2,.10 a share, thats 584 million shares outstanding.....nah...too much $614-ish million to but a 51%+ stake. Damn! Even is the stock hit $1.00 flat, still to much to raise. Ah well.....it was a thought.

 

[roofus]

interesting idea though. with their stocks as low as they are, it crossed my mind to buy up some and see what happens. if they fall to a dollar i will buy a thousand shares and sit on them for a while lol

 

[turpit]

I still cant help wondering if enough response could be generated.....I know for that kind of cash its not even remotley realistic.....but I still wonder.

 

[roofus]

you know this is a fairly big deal depending on it's merit. i am surprised it is being avoided the way it is.

 

[unclefester]

I've got enough in my pocket for three shares. Where doe I send the money?

 

[roofus]

*shrugs* sign up for an etrade account!

 

[unclefester]

They want a 5 spot for trade. Don't wanna lose 2 shares right out of the gate!

 

[roofus]

hehe yea i see your point there.

 

[turpit]

you know this is a fairly big deal depending on it's merit. i am surprised it is being avoided the way it is.

Well, the only good thing out of this is that AMD is protected. I have little doubt that were AMD not protected by the anti trust regulations, Intel would probably snap them up for the $1.2Billion Capex. On the other hand, with the licensing agreement, were any other company to buy them out right, they would lose the x86 licence.

 

[archibael]

Just reading about this on Rueters. I was going to start a thread, but since you have.....

When I came home today, I was fully expecting to see the dow down about 200 based on last fridays unemployment report, with Intel losing around 60 cents and AMD gaining 20 cents based on the estimate of a 5000~6000 head layoff at Intel.

Man.....did I sblow that one out my behind......almost 180' out.

The Dow is up almost $300, Intel up 65 cents and AMD down 3 cents.

I have no guestimation for this.....the only thing I can figure is the unfavorable rehash of the Abu deal impacted AMD/Intel

And the fact that the analyst who made the layoff estimate had no real sources and was just floating it to see if it would stick.

 

[Just_An_Engineer]

Well, the only good thing out of this is that AMD is protected. I have little doubt that were AMD not protected by the anti trust regulations, Intel would probably snap them up for the $1.2Billion Capex. On the other hand, with the licensing agreement, were any other company to buy them out right, they would lose the x86 licence.

I have a question regarding the x86 license agreement. From what I understand the actual details of the agreement are confidential and the only copies of it ever released (as evidence in lawsuits) were heavily redacted. Does anyone actually know that the license is non-transferable in the event of a sale or is this merely speculation?

 

[NMDante]

I have a question regarding the x86 license agreement. From what I understand the actual details of the agreement are confidential and the only copies of it ever released (as evidence in lawsuits) were heavily redacted. Does anyone actually know that the license is non-transferable in the event of a sale or is this merely speculation?

I guess you can call it speculation, since there is no "recent" copy of the license agreement floating around, to see the terms of the agreement. But based on the copy that has been used, I cannot a reason why Intel would remove that section or requirement.

Again, all speculation, unless the newest license agreement is made public.

redacted copy

 

[V3NOM]

please not another bunch of spam threads about the same topic :/

 

[fazers_on_stun]

What concerns me is that if Abu Dhabi has the power to alter the deal like this, what if they wan t to cancel outright? AMD is depending on the cash infusion to stay afloat in this recession. And while I might buy several hundred shares if I start seeing some positive AMD news (i.e., 3rd party benchies showing Deneb being competitive and priced to earn a profit), I don't think that'll make any difference to AMD.

As Ed pointed out, the UAE is in the driver's seat and AMD merely along for the ride. This would not give me any warm fuzzies as a stockholder...

I agree about Ruiz - we could play "coulda shoulda woulda" all day long but the fact is, he sold AMD's soul for the holy grail of marketshare. And if he had waited a year or so, he could have bought ATI for about half of what he paid.

After making some noise about the Abu Dhabi deal, Intel seems to have gone silent on it - I wonder if there is some negotiating going on about the antitrust suit?

 

[JAYDEEJOHN]

I hear Intels ditching HKMG, after being exposed as worthless j/k

Yea, tough break, but why pay for something that was worth more at first, when later its been devalued? Makes sense to me

 

[spongebob]

Does anyone actually know that the license is non-transferable in the event of a sale or is this merely speculation?

To license x86 without a Change of Control clause in the agreement would amount to Intel flushing control of their IP. Omitting this control from the agreement would be complete idiocy.

 

[fazers_on_stun]

I hear Intels ditching HKMG, after being exposed as worthless j/k

What's with you and HKMG? Yes I got the "joke" bit but seriously HKMG seems to crop up in quite a few of your posts. I think you may suffer from HKMG envy . Besides, even AMD is going to use it next generation, right?

Yea, tough break, but why pay for something that was worth more at first, when later its been devalued? Makes sense to me

Me too. Unfortunately, that trend may continue in which case the Abu Dhabi bailout won't salvage AMD's business model and they will be scrambling for more alternatives. My understanding is that the $700M promised to AMD is unchanged, for the moment, anyway. Assuming that the deal gets approved, if AMD posts another $400M loss this quarter (see the AMD revises revenue forecast downwards by 25% thread), there goes over half of that amount.

 

[JAYDEEJOHN]

Thing is, the 4xxx series monies will kick in this qtr, plus their spending is down, and the layoffs etc. I really do hope people are smart enough to understand what this would do to Intel, and cpus in general if this happens

 

[fazers_on_stun]

^ I don't think the 4xxx monies are going to make much of a dent in the debt AMD incurred in buying ATI, let alone float their CPU business.

AMD did not foresee this recession nor did they prepare for it as well as Intel has. The overall market is trending to cheaper netbooks it seems, as consumers are cutting spending, so Intel's Atom is well-positioned to take advantage of this. Where is Bobcat when AMD needs him?? Answer: canceled because with the ATI purchase, AMD simply cannot afford to pursue Intel on all fronts. Therefore they have to look in their crystal ball and predict the market a year or so down the road; if their prediction sucks then they will suffer.

Yes the recession will hurt Intel - they will simply make less money than otherwise. However they will still be around afterwards. Can you make the same statement about AMD?

 

[turpit]

I have a question regarding the x86 license agreement. From what I understand the actual details of the agreement are confidential and the only copies of it ever released (as evidence in lawsuits) were heavily redacted. Does anyone actually know that the license is non-transferable in the event of a sale or is this merely speculation?

Well, this is one of the last bits I saw regarding the licence from Intel. IMO, this is thin proof of the x86 licenec, so take it for what its worth.....it was the first one that poped to mind as it was the last time I remembered seeing anything about it....call it inverse law of primacy


Intel watches as rival AMD plans transformation

We've got questions about the transaction as it relates to the license between us and AMD," Intel spokesman Chuck Mulloy said Tuesday. "We as a company have an obligation to our shareholders to protect our intellectual property."

It's "premature," Mulloy said, to speculate about what action Intel might take to secure that intellectual property. AMD told journalists Tuesday that it believes its plans comply with its licensing deals.

So, while this is not by any means an actual copy of the license, we do have an Intel representative referencing "the license between us and AMD" which would seem to indicate that there is some form of x86 licence as I doubt they have anything regarding IGPs, GPUs or chipsets...maybe after the purchase of ATI...I dunno.


But we do also have an AMD response, hereAMD Says Manufacturing Deal Does Not Violate Intel Processor Patents

The day after AMD announced a significant deal that will spin off its manufacturing facilities into a new joint venture company, AMD is defending its licensing agreement with Intel. In the wake of the deal, Intel said it would review its processor licensing agreement with AMD to ensure the deal does not violate any patent agreements. An AMD spokesman said the deal does not impact the chip licensing agreement with Intel.

AMDs defense does seem to lend a little more credence to the X86 license limitations....at least that they exist, and that Intel beleives they may be restrictive to at least comment about it.

Take it for what its worth.....sorry its not more

 

[turpit]

I hear Intels ditching HKMG, after being exposed as worthless j/k

Yea, tough break, but why pay for something that was worth more at first, when later its been devalued? Makes sense to me

LMAO....nice try Jay. I get your point, but these posts have links, yours doesnt. So your point is somewhat....pointless?

 

[JAYDEEJOHN]

AMD just selling a 3Ghz 45nm cpu is proof enough, you can find plenty of links to buy one if you want to