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Can You Believe It: GameStop Now Worth More Than AMD

By - Source: Forbes | B 82 comments

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.


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Top Comments
  • 23 Hide
    bison88 , September 19, 2012 1:32 AM
    After 2008 you'd figure the stock market is no way to judge a companies success, but then again who knows.
  • 23 Hide
    tbq , September 19, 2012 1:20 AM
    I just bought 100 more shares this morning. I doubt the company is going to go bankrupt anytime soon.
  • 22 Hide
    wlachan , September 19, 2012 1:36 AM
    The last thing I want would be an Intel monopoly. My next CPU will be an AMD.
Other Comments
  • 23 Hide
    tbq , September 19, 2012 1:20 AM
    I just bought 100 more shares this morning. I doubt the company is going to go bankrupt anytime soon.
  • 0 Hide
    aoneone , September 19, 2012 1:21 AM
    Does this mean I can still sell my used ps3 games for pathetic dollars and watch the same used ps3 games be flipped around and re-sold to customers like me for nearly 5-10 times of what I turned them in for!? Well golly, please shaft me even more because I'm nearly bent over and head over heels weeeee!
  • 23 Hide
    bison88 , September 19, 2012 1:32 AM
    After 2008 you'd figure the stock market is no way to judge a companies success, but then again who knows.
  • 22 Hide
    wlachan , September 19, 2012 1:36 AM
    The last thing I want would be an Intel monopoly. My next CPU will be an AMD.
  • 18 Hide
    lascar30 , September 19, 2012 1:38 AM
    I hope that AMD comes back with new graphic cards and good CPU units. The ratio quality/price, AMD got it for sure. Keep it up.
  • 4 Hide
    Anonymous , September 19, 2012 1:49 AM
    The moment Intel put on the market the Core series, AMD lost the battle and never recovered. Only the ATI division remained competitive and I feel sad for them now because they would have probably fared better without AMD...
  • 8 Hide
    tomfreak , September 19, 2012 1:57 AM
    wlachanThe last thing I want would be an Intel monopoly. My next CPU will be an AMD.
    Indeed Intel Monopoly is bad, but I doubt Intel will drop budget segment. Chances are only the top end CPU get more expensive than b4, the low/mid end segment is likely to keep the same.

    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.
  • 9 Hide
    tipoo , September 19, 2012 2:02 AM
    It's interesting, ARM Holdings is now far more valuable than AMD as well

    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.
  • 13 Hide
    schnitter , September 19, 2012 2:09 AM
    I'm doing my part in buying an AMD 7970. Especially at its new price, there is no comparison in bang per buck. Plus having twice the ram is good for future icenhancer mod for gta 5. Or eyefiniti.
  • 18 Hide
    leongrado , September 19, 2012 2:16 AM
    Have you seen the prices on used games in Gamestop compared to how much they take them in for? Almost like scamming people. Best part is how many people still do it.
  • 7 Hide
    monkeymonk , September 19, 2012 2:17 AM
    otacon72When you release a statement basically saying you lost to intel what do you expect exactly? The entire middle to upper management at AMD needs to be fired asap if AMD has any hope of being relevant again.

    The funny thing is that they are already leaving
  • -7 Hide
    rds1220 , September 19, 2012 2:32 AM
    I really don't think there are to many left to fire. They already were fired after Bullcrapper was released or they decided to leave on their own soon after. Like I said I aklready said good riddance to them and I hope they do go down the toilet. Maybe Samung or Qualcomm will buiy them out and actually offer some real competion instead of crap.
  • 18 Hide
    cscott_it , September 19, 2012 2:33 AM
    rds1220Exactly what I was thinking. At this point I'm saying good riddance to AMD.


    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.
  • 12 Hide
    James296 , September 19, 2012 2:49 AM
    otacon72Enjoy your 2 generation behind CPU then.


    this makes you sound like you would enjoy a Intel monopoly >.>
  • 13 Hide
    bustapr , September 19, 2012 3:02 AM
    iamtheking123100 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.

    I really wouldnt say AMD gave up on innovation. since back in the day amd did athlon 64(innovative and revolutionary), x86-64, the first true mass market quad core(phenom), the first mass market 6 core(phenom 2x6), a new module based architecture(bulldozer), and the apu. from the gpu side, theyve been extremely competent and efficient. theyre still being the old innovative amd. theyre just not really great at making theyre innovations efficient and competent as of late in the cpu.

    my next build will definitely be amd. theyre CPUs are slower than intel, but in NO way are they bad. best support the underdog in this situation. Id hate to see amd just be bought off.
  • 15 Hide
    husker , September 19, 2012 3:05 AM
    iamtheking123100 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.

    Do you realize that Apple was valued at $14.49 10 years ago? With today's closing price of $701, 100 shares of that stock would net a profit of over $68,000. I'm not saying AMD is going to be the next Apple, but 100 shares on the cheap could really net some nice profit.
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