If you had invested your money in AMD in June, you would have lost about 30 percent. Had you invested in Gamestop, you would have made about 25 percent and hold shares of a company that is now valued higher than AMD.
Following the resignation of CFO Thomas Seifert, AMD's stock fell about 10 percent in Tuesday trading and landed at $3.62, a 41-month low. The market capitalization is now $2.56 billion and below the market capitalization of GameStop, which passed AMD today with $2.77 billion. GameStop is now listed #486 on the S&P 500 list, while AMD fell to #487.
The declining market cap is now approaching the total debt volume of the company, which stood at $2.02 billion at the end of the second quarter, with total current contract obligations of $4.2 billion. Last month, AMD was required to make a $485 million payment - the outstanding principal amount on $1.5 billion worth of 5.75 percent convertible senior notes that were issued in August of 2007 to overcome financial problems that were tied to the processor price war with Intel as well as the aftershock of the ATI acquisition.
Seifert mentioned this payment in the Q2 earnings call and said that he felt comfortable making the payment from the $1.58 billion cash reserve of the company, but noted that the company is monitoring other "potential opportunities" due to the weak economy, which would require AMD to keep more cash on hand. The company did not update this statement so far - a cash payment would send the company deep into the red for Q3, but it may have decided to refinance the debt.
AMD faces the next big cash payment of $225 million to Globalfoundries in Q1 2013. There are several other debt items that, however, will not be due until 2015 and later. There will be a $580 million payment due in 2015, a $500 million payment in 2017 and another $500 million in 2020.
With the economy weakening, PC sales tumbling and the stock value declining, financial analysts are more than likely to pay attention to AMD's debt position.
On another note, it's gotta be a good sign for the company that they have all the GPUs for the next-gen consoles... that's gotta help them out in the long run.
Enjoy your 2 generation behind CPU then.
If Intel think they can start charging $200 for celeron/Pentium class CPU, $500 for i5 then people would flop over to mobile market. I doubt Intel will drop budget segment
Phones are getting HDMI out connections, it wont be long they can be use as a desktop by adding keyboard + mouse connecter via mini usb, phone battery life problem? not a prob, I rather buy backup batteries for my phone than $2000-$3000 Intel midrange desktop.
http://www.wolframalpha.com/input/?i=AMD+ARM+Holdings
The latest licence deal between AMD and Intel means that the x86 licence CAN be transfered in a buyout, but only with Intels approval. I think ARM and AMD would be a fantastic pair. In one bound ARM performance could be closer to x86, and AMDs x86 chips could pick up some tricks for lower power draw.
100 shares is just wasting your time. They could double in value and your profit would be what an engineer makes in 1 day. They won't go bankrupt but I'm betting they'll be bought out by another company. Let's face it, AMD has pretty much thrown in the towel on innovation.
Exactly what I was thinking. At this point I'm saying good riddance to AMD.
The funny thing is that they are already leaving
AMD just brought some of their "old glory" from the Intel beating days as well as some new talent onboard, so I wouldn't count them out of the race just yet. It may take 3 years to see the fruits of this labor, but I think it will allow them to enter the mobile market and become closer to being competitive with Intel.
Personally - if that all pans out, I think any investment in AMD is wise long term investment. More of a portfolio choice and less of a daytrade pick.