AMD shares hit 16-year low as debt burden takes toll on strategy

[PBS Poll-435]

By Chris Nuttall in San Francisco
Published: July 12 2008 03:00 | Last updated: July 12 2008 03:00

Shares in Advanced Micro Devices fell to a 16-year low yesterday as $1bn in second-quarter charges highlighted its struggle to slim operations and return to profitability.

AMD announced the second writedown from its 2006 acquisition of the Canadian graphics chipmaker, ATI. It said it was taking an impairment charge of $880m, following a charge of about $1.5bn last year. It paid $5.4bn for ATI.

The microprocessor rival to Intel also announced a $32m restructuring charge as it made severance payments to laid-off employees, along with $36m in other charges. The bulk of these related to its shareholding in Spansion, the memory chipmaker it spun off in 2005.

AMD's acquisition of ATI represented a bold attempt to seize the initiative in a new semiconductor trend called visual computing. It envisages a blurring of the lines between linear central processing unit (CPU) microprocessors made by Intel and AMD and the parallel-processing graphics processing units (GPUs) that have been made by ATI and rival Nvidia.

http://www.ft.com/cms/s/0/eef8db26-4fb5-11dd-b050-000077b07658.html

[MisterP]

1. smoke seems to be pouring out of Wachovia's engines as well n/t

[PBS Poll-435]

3. Yeah....pssst.....

You have a clue.

:thumbsup:

[DJ13]

2. It was lower in October 2002

That title was premature by a few weeks at the rate the markets are tanking.

[PBS Poll-435]

4. AMD seems to be "outperforming" the market in terms of decent speed.

I don't get it at all.

[DJ13]

6. Earnings next Thursday

They usually get beaten up by the institutional investors in the weeks before earnings are released, as AMD has a too long "quiet period" by their investor relations department that gives carte blanc to any rumor put out on the street to kill their stock price.

Their ATI division actually just came out with the next "big thing" in graphics acceleration for the gaming market, so it could be someone wants cheap shares.

[PBS Poll-435]

7. That was my thought

Server CPUs they are doing very well and the graphics division is about to go :puke:gangbusters!:puke:

[TahitiNut]

8. With AMD, the clue is watching insider trades and ISO exercises.

In the 80s, they made Enron management (Lay, Skilling, et. al.) look like choir boys. I don't think they've changed. I see a few names I know (personally) ... and it looks like they're playing the same games.

[PBS Poll-435]

9. They have lost a lot of upper-level execs in the last year.

The CEO/Chairman is the only one left, I believe, that has significant personal investment.

[TahitiNut]

10. Jerry Sanders?

(lol!) The tales I could tell. Hector Ruiz I only knew indirectly. Tom McCoy, however ... well. :eyes:

[PBS Poll-435]

11. I think we may have unlocked the mystery of TahitiNut

:-)


I was really talking about Henri Richard.

And I am not involved in anyway with AMD.

Just love their junk.

[TahitiNut]

13. Yeah... well... once upon a time ....

... I personally knew virtually every senior exec and most members of the board. It was an interesting experience. To say the least (and most that I'm allowed to).

[PBS Poll-435]

14. NDAs excluded,

:-)

[TahitiNut]

17. Yup.

(sigh)

[Fleshdancer]

20. ooooh....I wanna hear I wanna hear!!!

I'm a sucker for industry gossip :D

:bounce:

[PBS Poll-435]

5. AMD is leading the market right now in price/performance desktop graphic solutions

I don't get the write-down at all.

[TwixVoy]

21. You are right

the new Radeon cards are great... however think about the state of PC games right now. Not many big games coming out any time soon to demand that kind of performance. Therefore very little need for most people to buy those cards.

Also Intel is still taking names in the CPU wars. Phenom has been a POS in comparison. I don't see AMD coming up with a competitor to Nephilim either....

[lurky]

12. I like having an alternative to Intel.

Especially one that costs half as much with equivalent performance. I rebuilt my home machine about six months ago using one of AMD's 64-bit dual cores, and it does really well.

Also, the whole competition thing keeps prices down and drives them to keep making design improvements. If Intel were the only game in town, I have a feeling they would jack up prices and slow their R&D.

[PBS Poll-435]

16. It actually is what they DID do until AMD unleashed the Athlon 64.

A single core CPU at 3.8 Ghz and 1.45 - 1.6 nominal voltage?

Forget that. The Intel P4 was a disaster. Not financially, but their reputation suffered.

[Skink]

15. My Amd keeps me online.

They rock. Of course I had to wipe the H drive once but I figured that was cool anyway.

[Jack_DeLeon]

18. I'm rooting for AMD...

they might not always have the absolute highest performing chip out there, but they almost always give you the best bang for the buck.

[Fleshdancer]

19. $5.4 BILLION for ATI??? Really?

How was ATI worth that much money?