Can You Believe It: GameStop Now Worth More 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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  • eric4277
    maybe AMD should stop producing crap
  • tbq
    I just bought 100 more shares this morning. I doubt the company is going to go bankrupt anytime soon.
  • Raid3r
    "You must lose everything before you are free to do anything"
  • aoneone
    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!
  • bison88
    After 2008 you'd figure the stock market is no way to judge a companies success, but then again who knows.
  • wlachan
    The last thing I want would be an Intel monopoly. My next CPU will be an AMD.
  • lascar30
    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.
  • 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...
  • tomfreak
    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.
  • tipoo
    It's interesting, ARM Holdings is now far more valuable than AMD as well

    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.