Only to a point -- if a stock price gets low enough and stays there long enough it may not qualify for institutional ownership. Conservative mainstream mutual funds will be forced to liquidate their positions. You may know if AMD is widely held by institutionals -- I'm not interested in enough to find out.
But $10 is a very important stock price level for another reason. A completely different class of 'investors' trade companies with stock prices under $10. That's why companies do reverse stock splits (which as a rule are never a good thing from a long position standpoint).
A corporation's stock is its currency. Costs very little to issue more stock, yet that stock can be used to buy market share and assets and grow the company through acquisition as well as compensate employees and management without dipping into cash. We all agree growth and keeping cash are good goals, yes?
So it does matter.
AMD's 6 month chart looks like roadkill -- from a technicals standpoint there's no short term bottom in sight. AMD is nowhere near a penny stock yet, but it is now a remote possibility.
Theo. LOL.
Assuming Theo is correct, ordering "massive amounts of 55nm 300mm wafers" is not the same as revenue, and is more like an expense. The article doesn't state when the orders will be fulfilled. Was the massive amount just for Q4? Will part of that order be fulfilled in Q1? While it does indicate a healthy ramp in the future it is not the equivalent to "massive number of finished HD 38xx products sold in Q4 and an extra $300 million in revenue for AMD".
The stock price quoting troll hits again...
When are you going to learn that it just doesn't matter
It doesn't matter a bit unless one happens to have invested in this disaster. Most people invest so that at some reasonable length of time they can make a profit and enjoy spending it. In this case lack of performance coupled with very high risk financials are driving the stock towards the basement. AMD now owes more than it's market value. People on this forum are interested in how AMD is doing and that includes the stock price.
It's certainly nothing personal unless you're an AMD employee.
When are you going to learn that it just doesn't matter
It doesn't matter a bit unless one happens to have invested in this disaster. Most people invest so that at some reasonable length of time they can make a profit and enjoy spending it. In this case lack of performance coupled with very high risk financials are driving the stock towards the basement. AMD now owes more than it's market value. People on this forum are interested in how AMD is doing and that includes the stock price.
It's certainly nothing personal unless you're an AMD employee.
Originally posted by: NXIL
Originally posted by: KingstonU
I was certain that Phenom would be The Return of the Jedi (to use a great analogy from Anand)
But it was instead more of The Empire Strikes Back where Intel just cut off AMD's hand
Noooooooooooooooooo!!!!!!!!!
LOL, I could have taken this further, but I wasn't brave enough
Now this bugs me. Debt to market cap ratio has no meaning. None. Zero. Zilch.
Debt to assets, debt to cashflow, possibly even debt to revenue -- sure. But what does market cap have to do with solvency of the company? You might as well compare AMDs debt to the price of oranges at the local supermarket.
It's amazing how little people seem to know about capital markets. High debt ratios limit a company's ability to raise money. it's not the only factor but it's important when a company's burn rate is higher than it's revenue. That's called LOSING MONEY! If this goes on for a while often the company needs to raise OPERATING CASH. AMD has done this several times in the past year. NEW lenders and potential capital partners do not like to get in line behind too many other creditors, often placing onerous restrictions on the company's management. Companies often use their own stock as collateral or payment. As the market value of the company dwindles, the stock owned by the company is a less attractive option for collateral. Thus the possibilty of running short of money to pay the bills becomes a real possibility. This has happened many times before.
I believe AMD will survive in some form or another but the risk for the shareholders and bondholders to lose their investments in the current company is high, IMHO.
I believe AMD will survive in some form or another but the risk for the shareholders and bondholders to lose their investments in the current company is high, IMHO.
Ok, I'll bite. Can you cite at least one case post-Enron where a company issued stock to be used as collateral or payment to creditors?
Lenders prefer to have debt secured by assets. That's the definition of bankrupt -- your debt exceeds your assets (and ability to repay). The theoretical value of your company is ( assets - debt ) + premium_for_expected_growth. Making a meaningful ratio out of that by dividing by debt makes very little math sense.
Stockholders come after creditors, so using stock as collateral is... a rather obtuse move on the part of the lender. I'm not up on my banking regulations but I wouldn't be shocked if there are regulations, not just accepted practices against doing that.
Now, investors of all flavors are a whole other bag of worms. It's harder to raise new cash by plain old secondary offerings if your stock is in the toilet, yes. I've already said that. But that mostly affects growth, not so much sustainability. Nobody in the right mind would buy a secondary offering of a company that needed that cash just to stay afloat.
taltamir
Lifer
- Mar 21, 2004
- 13,576
- 6
- 76
No, original Xboxes were sold below cost because the company WAS SUBSIDIZING them with sales of games. Taking a huge cut of licensing fee per game sold.
That is a huge difference... it will be completely valid for AMD to sale video cards below cost if they made games that can only run on AMD video cards and AMD charged the manufacturers of those games a licensing fee.
The only case I have ever seen of a company selling below cost without having a complementary product subsidizing it was a case of fraud where the CEO was ripping off investors using a puppet company.
This thread is a joke.
From the title (All Barcelona Shipments have not been Halted) - the OP even acknowledges this in his original commentary . . .
To the financial geniuses (?) whose commentary reveals they can't find a balance sheet much less read one.
AMD will survive in their own convoluted way. What you better hope for is that some brave venture capitalists don't buy AMD and take it private.
From the AMD 10-Q:
btw - Companies sell product at a loss all the time. They do it for competitive reasons, they do it for cash flow, they do it for inventory management, they do it for tax purposes, they do it to clear the 'channel', etc. . . .
From the title (All Barcelona Shipments have not been Halted) - the OP even acknowledges this in his original commentary . . .
To the financial geniuses (?) whose commentary reveals they can't find a balance sheet much less read one.
AMD will survive in their own convoluted way. What you better hope for is that some brave venture capitalists don't buy AMD and take it private.
From the AMD 10-Q:
btw - Companies sell product at a loss all the time. They do it for competitive reasons, they do it for cash flow, they do it for inventory management, they do it for tax purposes, they do it to clear the 'channel', etc. . . .
I dunno what's your obsession with secondary stock offerings. Most mature companies use debt to finance their company operations and capital investments, not stock. That's why stock price don't matter that much, the companies debt structure matters more in raising cash. However, stock price is sometime a good indicator of debt structure, because if a company have bad debt structure, their stock is likely to be worthless.
Again, AMD have to make money in their operations, I don't care how they do it, make better product or cut cost so they can compete on price. They don't have to beat Intel in products to survive, they have manage to do that for a long time prior to A64. Only geeks think AMD will go bankrupt simply because they don't have the fastest cpu. AMD needs to run their company better, and make some cash. As long as they can do that, they will come out with great product once a while and make geeks all around the world happy.
You and I are in violent agreement. There's a reason for the bond market and commercial paper, and short term liquidity is it. Best case scenario the company you invest in has 0 cash on hand, they money is all invested and returning more than the cost of the short term loans, bonds or otherwise. And if the company can perform better than the cost of long term interest, then by all means load up the debt!
My original thesis is the ratio of market cap to debt has absolutely zero meaning. And the followup was me disbelieving any lender would use company stock as collateral.
If by stock price you mean total market cap, we are once again in agreement. If the assets-debt+growth formula yields a small or a negative number the market cap isn't going to be very large either. Comparing that to debt again as the original poster did is meaningless.
While what you say is completely self-evident and true, there is one more thing. Companies which do not grow tend to wither and die, or be bought out.
Plenty of people have posted financials which show AMD on the mend. After the year they've had that's a great thing for all of us. But geeks or not, if AMD does not compete with Intel and NVidia at the top end at least every so often or they run the risk of joining Cyrix and 3dfx in some other firm's portfolio.
taltamir
Lifer
- Mar 21, 2004
- 13,576
- 6
- 76
Obviously if a company manufactured too much of a product that they can't sell at anything BUT a loss they are better off selling it then not.
But the context of that discussion was the point that companies don't sell a product at a loss intentionally (unless they expect to make it up in licensing fees or other required goods), that is, manufacturing more of a product that you know and intend to sell at a loss. Rather then manufacturing something to sell at a profit and finding out there is something better for cheaper from a competitor forcing you sell that specific stock at a loss.
If AMD was loosing money on ever processor sale they would have immediately halted production, as every additional sale means loosing more money AND saturating the market further (decreasing their ability to sell other products that might be profitable)
myocardia
Diamond Member
- Jun 21, 2003
- 9,291
- 30
- 91
Well, I understand. I get told alot that I speak in riddles. What I meant by that second sentence was that no company on earth would sell their best selling product, which at the moment for AMD are the 3800 series graphics cards, at a loss. Might they sell one product below cost? Sure, but if they did, that one product wouldn't be their top selling product. Make sense now?
Well, the Phenom is another story. And with the very limited number of those that they'll sell, I could see them selling them at a loss, or for what they cost to manufacture. I highly doubt they would, since they could raise the price by $5-10, so they could at least break even, but I wouldn't want to debate that, because they may very well be selling them below cost, and from the reviews, I wouldn't really blame them. I mean, getting some money from your investment is much better than no money, right?
Yeah, but I wasn't talking about today, or the last year. I was talking about all of those years between 1990 and 2000, when almost every single person in America wanted an SUV. Chevrolet and Ford (I heard) were selling their cheaper, way better MPG cars, at a slight loss, because CAFE forced them to. CAFE goes by average gas mileage, and each company has to average a certain MPG, or they will be fined. Of course, that may not be correct, that's just the way I've read a few times that CAFE works.
I never take anything here personal. Disagree with me all you want, it won't make me like you any less. As far as I know, these internet forums are just places for people like you and I to share our knowledge (in some instances), or our opinions, with the general public. And I guess we all know what's going to happen when people start sharing opinions, don't we?
Pardon me. I didn't realize you had already graced the Anandtech forum with your presence. Perhaps you can keep your personal insults and paranoia at Futuremark to avoid burdening the forum members here. And feel free to send me an apology if AMD posts Q4 graphics revenue far less than $552 million (a $300 million gain over Q3).
Will you be posting a general apology if AMD posts a Graphics gain more than the $30 Million you predicted?
BTW, I should mention that I DO very much appreciate the debate of facts here...thanks!
I predicted that HD 38xx sales would be $30 million, not that total graphics revenue would only be up $30 million. Reports are computer sales so far are strong in Q4 which is good for the graphics business in general. It is quite possible AMD will see a sales increase from other products. The HD 2600 and HD 2400 were barely available at the start of Q3 so AMD should be selling far more of those GPUs in Q4 than they were in Q3. Overall I don't see AMD's graphics division being able to gain much more than $50 million over Q3 so I don't expect AMD to make much more than $300 million. I will be more than happy to congratulate you on your estimate if AMD's graphics revenue is closer to $552 million than $300 million.
TSMC also owns more fabs than AMD, and has hundreds of customers...
And produces both ATis and Nvidias chips...
Why the hell do you try to spin AMD postively all the time?
taltamir
Lifer
- Mar 21, 2004
- 13,576
- 6
- 76
You know you would THINK that with AMD buying ATI they would need MORE fabs not less... I don't know why AMD insists that it has to outsource everything... producing in house is cheaper, gives more profits, and more control over the product.
Then again, at least when they out source it it WORKS...
AMD cant manufacture their phenoms right in 65nm but IBM or whatever is making their video cards at 45nm perfectly.
Then again, at least when they out source it it WORKS...
AMD cant manufacture their phenoms right in 65nm but IBM or whatever is making their video cards at 45nm perfectly.
Teacher? Med school? Socratic?
Agree, 100%.....
But, they do not operate in a vacuum--if nVidia drops the price of the 8800GT to $199 (sooner rather than later--the price will drop over the next year or two, but, if they drop it in Jan 08 because they have been able to produce enough to fill demand), that would put a lot of pressure on them, since the 38XX series does not perform as well as the 8800GT--AMD would have to drop the price, or sell very few, regardless of their cost basis.
Same with Phenom: if it were the only quad core on the market? Cool. But, you have the Q6600 from Intel sitting there at about $280....and it is about 10% faster, or more. So, even if each Phenom is costing them $500 to make right now, due to low yields, or other inefficiencies, it's hard for them to sell it except for less than the price the Q6600 sets.
Andy Grove: only the paranoid survive. Hopefully AMD got a copy of his book, and is paranoid now.
Thx,
NXIL
Producing in house doesn't make sense for every product, which is why there is a general trend in the semiconductor industry right now of going "fab light" and relying more heavily on foundries.
Neither ATI nor NVIDIA has ever run their own production fabs. 3dfx did briefly, before they went under. Fabs require enormous amounts of money to build, and substantial amounts of money to upgrade as process technology marches forward, and so for a lot of companies it makes sense to send more work to a foundry.
Whether this is the right thing to do varies with a lot of factors, and is difficult to predict adequately.
AFAIK, all ATI GPUs are fabbed by TSMC. The most recent generation is 55 nm, not 45 nm. There are a lot of differences between how CPUs are designed and how GPUs are designed, and those become important when you start changing process nodes.
In an effort to contribute absolutely nothing to the discussion, I am now going to say this.
Barcelona Shipments Halted: Fawlty Logic Discovered
http://newsimg.bbc.co.uk/media.../_40816030_fawlty1.jpg
"Manuel... are you telling me that our quad cores only have three cores?"
"Oh no, Mr. Fawlty. They have four cores, like you say. But one of them doesn't work."
"Let me guess, Manuel, you named them Barcelonas, because you are from Barcelona?"
"Si, Mr. Fawlty. That is exactly it!"
"Well, I suppose we're all lucky you're not from Cockburn... "
Barcelona Shipments Halted: Fawlty Logic Discovered
http://newsimg.bbc.co.uk/media.../_40816030_fawlty1.jpg
"Manuel... are you telling me that our quad cores only have three cores?"
"Oh no, Mr. Fawlty. They have four cores, like you say. But one of them doesn't work."
"Let me guess, Manuel, you named them Barcelonas, because you are from Barcelona?"
"Si, Mr. Fawlty. That is exactly it!"
"Well, I suppose we're all lucky you're not from Cockburn... "
TRENDING THREADS
-
Discussion Zen 5 Speculation (EPYC Turin and Strix Point/Granite Ridge - Ryzen 9000)- Started by DisEnchantment
- Replies: 20K
-
Discussion Intel current and future Lakes & Rapids thread- Started by TheF34RChannel
- Replies: 23K
-
Discussion Intel Meteor, Arrow, Lunar & Panther Lakes Discussion Threads
- Started by Tigerick
- Replies: 12K
-
Discussion Speculation: Zen 4 (EPYC 4 "Genoa", Ryzen 7000, etc.)- Started by Vattila
- Replies: 13K
-
Facebook
Twitter