AMD Loses Half Market Value in 6 Mos., Investors Pessimistic

AMD stock was trading in the neighborhood of $4.10 on Thursday, which is down from $8.25 in March of this year. The market cap of AMD has settled below $3 billion, the lowest since August 2009. The stock traded as high as $46 during the height of the dotcom boom and $40 in 2006, when the company was challenging Intel's processor dominance with its Opteron and Athlon X2 CPUs.

While AMD was able to recover in 2002 and 2009, there are signs that AMD may be stuck in the $4 segment for awhile. According to investment research firm Schaeffer's, almost 15 percent of current AMD stock investments are betting on a declining stock value over time. The firm noted that current trading indicate a bearish sentiment "for the long haul" and recent aggressive investments bet that the stock will drop even below $3 with a profitability target for short interest investments of $2.84 by January 2013.

So far, this is just speculation. However, there is no denying that AMD's board and investor base will grow increasingly nervous if the stock continues to slide. On the day CEO Rory Read was hired, AMD's stock stood at $6.49, and at $8.83 when his predecessor Dirk Meyer was let go. AMD's stock has always been rocked by sharp ups and downs and Meyer had to deal with prices as low as $1.82 in November 2008, but Read's hiring appeared to be focused exactly at avoiding those sharp declines.

The recent downward trend began in April 2010 and AMD's new executive management needs an effective plan to inject more confidence in the company again. Otherwise, the recently launched transition toward a much more consumer-oriented company could come to a sudden stop and AMD may turn into a bargain acquisition target for increasingly powerful ARM SoC designers.

 

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  • geekapproved
    You Intel fans better hope AMD succeeds, or you'll be paying $1000 for mainstream cpu's like you used to.
    35
  • dudewitbow
    spartanmk2Good news for Nvidia?

    their gpu business isn't failing, its the cpu business. too many delays on the release on their cpus(trinity was supposed to be may, opening up in october is an example)
    24
  • proxy711
    Ouch that's not good news. I'm not sure what they expected though after claiming they can't keep up with intel and they wont get into a race with them anymore.

    Just because everyone knows that you're getting your ass handed to you by intel doesn't mean you can outright say so. Never show weakness.
    23
  • Other Comments
  • proxy711
    Ouch that's not good news. I'm not sure what they expected though after claiming they can't keep up with intel and they wont get into a race with them anymore.

    Just because everyone knows that you're getting your ass handed to you by intel doesn't mean you can outright say so. Never show weakness.
    23
  • computernerdforlife
    How to make easy money - short trade: RIM, Groupon, Facebook, AMD, and Dell to guarantee huge money in 3 months time.
    -18
  • spartanmk2
    Good news for Nvidia?
    -22