AMD asks to double common stock to 1.5 billion shares - Page 2

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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.

But nVidia is only a littie bit larger than AMD 8O

http://messages.finance.yahoo.com/mb/AMD

that´s what i call brutality

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.

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.

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!

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

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

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.

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.

you are only figureing in part of it though. They are to small to expand in every direction at once, they cant support that amount of growth, and yet, that is what they are trying to do, and look where it has gotten them? No cash on hand, more debt then they are worth, and a brand name that is worth more, broken up and sold seperatly then togethor. This, to me, doesnt seem like a company on the move, it sems like a company sinking fast

often, company leaders will sale some of their stock, back to the company,at current market value, for the company to use as it sees fit, includeing as leverage. Leverage is when a company owns enough of its own stock, that no one can buy them out, although AMD doesnt own that much of its stock, if it does double its comon stock, and nows owns the 3% that it bought from its leaders,then it will own around 57% of itself, enough to defeat any takeover attempt

wow, this has been blown out of proportion bigtime. AMD, nor its exexcutives, have done anything illegal, they are hurting the company through stupidity, but that isnt illegal.
All of this, could simply be a means for AMD to stop any chance of a takeover, giveing the company more then 50% of total ownership now, while it hurts the image, will save the company later if someone, nvidia, is planing to try to buy them out. On the bright side, if Nvidia does buy em out, my shares in thqat company will go up!

I understand what leverage is and how it can be used, but to do it in the manner that you suggest would be illegal. It would similar to conterfeiting, by printing up a lot of shares that either have no value in themselves or decrease the value of the stock held by the shareholders. True leverage is when, for example, a company has issued stock at a given valuation and it retains control of 51% of the shares. To simply try to get the 51% without compensation to the shareholders so their ownership value remains unchanged, as in a stock split, amounts to theft from the present shareholders. The courts typically look at such things in a highly unfriendly manner.

Since the SEC said that this split has to be approved by the shareholders, I can't imagine that the major holders (such as mutual funds) would voluntarily give up half their investment, nor would they desire to face their own stockholders if they did such a thing.

Looking at the third paragraph in the Inq which describes the stock sale as "in the best interests of the stockholders", it makes me wonder if the heads of AMD have gotten so used to lying that they actually believe their own lies. There is no way that a stock sale such as this could be in the best interests of the stockholders if it is anything except a stock split.

wow, the level of ignorance displayed on the subject of finance is amazing...

i was going to make a long post to correct a lot of misunderstandings, but lance525's post was excellent. GO BACK AND READ IT.

those of you claiming that this will dillute shares by half or cause harm to shareholders in order to benefit management are demonstrating your complete lack of knowledge...

cut eps in half because of unissued shares? the tech equivalent would be saying that you expect your HL2 fps to double because you increased your ram from 1 to 2gb. slly, yes? and expecting an eps cut in half looks just as silly to those of us who know finance...

in theory, the actual issuance has ZERO impact on the company
in real world in has some effect, because it signals the market that amd may have some future cash flow problems and therefore could cause a drop in stock price. (on the other hand, one could argue that th e market is already very aware of amd's potential cash problems)


jackxlj - please stop talking... you don't know what your talking about.
1) your post about takeover protection shows a clear misunderstanding as to the difference between unissued shares and treasury stock
2) your definition of "leverage" is incorrect
3) you said that amd has "more debt then they are worth" and that they need to "come close to paying off the diffrent loans they took out."
- both those statments are completly untrue. AMD has less debt than market capitalization and they are not in default on any loans
- you need to be more careful with what you say about a company and their creditors. your false statments about that could constitute libel. i doubt anyone will sue you over it but still, you houldn't say things like that unless you know it

-tiger

jackxlj are you drunk?

Exactly. I don´t expect that they want to be taken over. Maybe they created the rumor of the takeover to increase the value of the new shares.

you are so off,never once did i say they were in default on any loans. Also you are grosly wrong about what the doubleing of common shares will do to the companys outstanding stock.
http://www.findarticles.com/p/arti [...] _n16548322, this is a financial look at AMDs debt,placeing AMDs debt at 3.2 billion.
http://finance.yahoo.com/q/ks?s=AMD
this is amds current finanaces.
Se anything funny here? They had a negative profit margin, and a negitive return of equity. That is why I said they ned to pay off the loans,becouse it is hurting their bottom line as long as they have to pay them.
On to other things, total stock, equals an amount of ownership in said company, doubleing the stock, will lower said value by half, as you will own a small part of said company. I can do an apples in peices to make it easy for you

its always a tossup, if it works or not. Hindsight makes everything wrong. If k10 and r600 demolish the competition, then this will be seen as genius, if they tank, it will be seen as the prelude to the end of the current board of directors...such a fine line to walk

you're an embarrasment to yourself. Doubling unissued shares does absolutely nothing to th value of the stock or the price per share. these are unissued, not outstanding. you could raise the number of unissued shares by a trillion, it would make no difference to the value or anything else.

you could say that interest on loans negatively effects every company's bottom line... you don't have a clue about capital structure.

frankly, jackxlj, you're one of those people who knows just enough to be dangerous - but once again by opening your mouth you just show how ignorant you are.

You're going to break down the apple into pieces for me???!!!
hahahaha

to sum it up, unissued, oustanding and treasury shares are all different. take some time to educate yourself before you speak

ps. yes, amd has debt of about 3.2 billion and a market cap of about 8 billion, thus your statrment that they have more debt than they are worth was (as i pointed out) completely incorrect.

Agreed. A massive pain for Nvidia due to ATi.

IBM buying AMD? Anyone ever heard of Lenevo?

Oh yes, ATi also make the Wii GPU, and we all know how well that is selling

I dont insist on the nvidia buyout of AMD,its just my favorite theory,giveing everything. Even if Nvidia doesnt sale off the ati brand, they wont be monopoly becouse of Via,Sis,and Intel. They would only around 30% of the gpu market,hardly a monopoly. Also, they have been looking for a chance to make x86 cpus, but dont have the liscence, if they bought AMD,they would...even better, if they bought AMD, then they could sale ATI, and make a good portion of the cost of buying AMD back instantly. They have a high credit rateing, absurdly low debt, and very nice income. They also have a ceo who is hungry to expand, and aboard of directors that backs him 100%, and investors who are totaly behind them. AMD is at a low point, stock a shadow of its normal self, and who wouldnt spend 9 billion once if they had the chance to make 4 billion off of it a year?

Doubling the shares, unissued or otherwise, does nothing to the value of the stock? I think you need to go back and study math again. Doubling the number of shares halves the value of the per share. The company is only worth a given amount of money. An amount of shares are issued based upon that value. If the share number is increased, the per share valuation is decreased in like percentage unless the company does something to increase its value in like percentage.

this is exactly the stupidity i am talking about. doubling th unissued shares DOES NOT NOT NOT NOT NOT halve the value per share. a doubling of outstanding shares would that. So, yes, they are different. Math is not the problem for anyone here. Perhaps you should take a class in finance. oh now, thats right you'd rather just insist that you're right like that makes it so

News like this often creates an oversold situation, so after monday buy back in for a quick 5-10% return. That is risky though, very much like day trading so don't take my advise on that, I will deny I ever suggested it ...


It's always tempting to spin the wheel, and I've done it a few times, but....I'm inclined to continue doting on the new baby here instead.

Saw this you might find a bit interesting:

"The selloff probably has excited private-equity firms like Blackstone Group, Bain Capital and Kohlberg Kravis Roberts, which are sitting on record levels of cash. In a recent report, Credit Suisse strategist Andrew Garthwaite estimated there is $250 billion to $280 billion of uninvested private-equity money, which could support $1.3 trillion of leveraged buyouts. With private-equity firms continuing to raise new money, their investment firepower will only grow."

"sell off" is re the stock market this last week. excerpt from this weeks Barron's cover story, on Newstands everywhere.