AMD Financial News

[Viditor]

Webcast announcement
Oct 7 8AM Eastern

Two Abu Dhabi state-owned venture capital companies are backing the move. One will put up at least $5.7 billion into the spun off factories and the other will buy more than $300 million in AMD stock and warrants.

 

[ViRGE]

Thanks, I had been wondering if the call would be public or not.

 

[microAmp]

Originally posted by: ViRGE
Thanks, I had been wondering if the call would be public or not.

removing text

 

[ViRGE]

It's 5am, why can't I get in?

 

[Viditor]

Originally posted by: ViRGE
It's 5am, why can't I get in?

I dunno...webcast is now running

 

[ViRGE]

Yeah, I got in. Stupid IE.

 

[Viditor]

Originally posted by: ViRGE
Yeah, I got in. Stupid IE.

As a side note...it looks like the market likes the financing. AMD is up ~28% in pre-market

To add some notes...

1. Hector Ruiz is leaving AMD to become the Chairman at the new Foundry company.
2. Doug Grose will relinquish his current role as AMD?s senior vice president of manufacturing operations to become chief executive officer of The Foundry Company
3. ATIC (Abu Dhabi) will end up with 19.3% of AMD and 55.6% of the Foundry Company.
4. ATIC is giving AMD a total of $2.1 Billion in cash, assuming $1.2 Billion of AMD's debt, and guaranteeing up to $6 Billion for future development of the Foundry Company.spending

I should also mention that it will be much easier now for AMD to acheive profitability each quarter as they have cut out their largest expense...

 

[robmurphy]

If anyone cannot get the wecast the FT have an article on this here:

http://www.ft.com/cms/s/0/a11e...953e-000077b07658.html

Rob.

 

[aldamon]

Can someone explain how shareholders avoid being diluted by this deal? Going up like crazy in PM.

 

[Byte]

Yes! I'm glad AMD is going to make a comeback. I'm also glad more money will be going to the middle east!

 

[Bateluer]

http://www.nytimes.com/2008/10...technology/07chip.html

 

[Viditor]

Originally posted by: aldamon
Can someone explain how shareholders avoid being diluted by this deal? Going up like crazy in PM.

Shareholders WILL be diluted...but the majority of AMD's debt just went away (or will shortly), so it's a mixed bag. However, it makes AMD much more secure than they were during the current market crisis...

 

[Nemesis 1]

Originally posted by: Viditor
Webcast announcement
Oct 7 8AM Eastern

Two Abu Dhabi state-owned venture capital companies are backing the move. One will put up at least $5.7 billion into the spun off factories and the other will buy more than $300 million in AMD stock and warrants.

Ya its really looking good for AMD . I am in @ 3.43

 

[Viditor]

Originally posted by: Nemesis 1

Originally posted by: Viditor
Webcast announcement
Oct 7 8AM Eastern

Two Abu Dhabi state-owned venture capital companies are backing the move. One will put up at least $5.7 billion into the spun off factories and the other will buy more than $300 million in AMD stock and warrants.

Ya its really looking good for AMD . I am in @ 3.43

Really? When did you buy? I haven't seen it that low since October 02...
Congrats

 

[Nemesis 1]

LOL . 4.43 missed key and the low 3.

 

[Viditor]

Originally posted by: Nemesis 1
LOL . 4.43 missed key and the low 3.

That makes far more sense...so you're already up about 25%, and I would bet that we see a short squeeze here as well (already 10 million shares traded), whcih could really get this thing rising!

 

[Idontcare]

I guess this puts all that "AMD can't spin-off their fabs because they will lose their x86 license" debate to rest.

It also puts to rest the lies about Dirk Meyer being misquoted. There clearly was no communication error and Dirk meant exactly what he said. Can't believe AMD corrected that interview to become a packet of lies as well.

Same old AMD, new ownership will hopefully bring some change.

Next question is what will the Foundry Co. do to make money. Just because AMD spun them off doesn't suddenly make the fabs profitable.

I see them going hard after the SUN foundry business (currently TSMC) as well as the high-performance GPU business. Can you imagine Nvidia chips being pumped out of Dresden :Q

They have to do something other than just make AMD chips. If AMD thought making AMD's chips was going to be profitable (based on what they know that we don't about Deneb/Shanghai as well as Bulldozer and Fusion) then AMD would have surely kept their fabs inhouse.

So the new operation sees itself as viable based on taking business from TSMC/UMC/Chartered. And that's a tall task given IBM's very efforts to accomplish the same for the past decade.

 

[VirtualLarry]

So AMD found their financial white knight, eh?

 

[apoppin]

Yes they did

i have been arguing FOR this for many months [at B3D]

asset-lite is the smart way to go .. they just could not afford this before

it looks like AMD's future is far more secure than last month

 

[Nemesis 1]

AMD and Intel must I have come to an agreement. Because this does break the other agreement. Now if AMds 45nm is as efficient as stated. This could be interesting.

 

[SlowSpyder]

Did AMD mention using this new fab company for just CPU's or GPU's too?

 

[Martimus]

Originally posted by: Idontcare
I guess this puts all that "AMD can't spin-off their fabs because they will lose their x86 license" debate to rest.

It also puts to rest the lies about Dirk Meyer being misquoted. There clearly was no communication error and Dirk meant exactly what he said. Can't believe AMD corrected that interview to become a packet of lies as well.

Same old AMD, new ownership will hopefully bring some change.

Next question is what will the Foundry Co. do to make money. Just because AMD spun them off doesn't suddenly make the fabs profitable.

I see them going hard after the SUN foundry business (currently TSMC) as well as the high-performance GPU business. Can you imagine Nvidia chips being pumped out of Dresden :Q

They have to do something other than just make AMD chips. If AMD thought making AMD's chips was going to be profitable (based on what they know that we don't about Deneb/Shanghai as well as Bulldozer and Fusion) then AMD would have surely kept their fabs inhouse.

So the new operation sees itself as viable based on taking business from TSMC/UMC/Chartered. And that's a tall task given IBM's very efforts to accomplish the same for the past decade.

If this is all like the spin-off of Delphi (which I was a part of), it is more an effort by AMD to rid themselves of an unprofitable portion of their business. GM never intented Delphi to be profitable, nor did they care. They just lumped enough profitable portions into the deal to keep them afloat for a few years while they found new suppliers to buy parts from. One thing we did after the spin off was work our butts off to get new customers for our components. I can say that we generally had better facilities and quality than our competitors, but also a much higher operating cost. We tried to cut the negative (operating costs) while keeping the positive (higher quality), but success was mixed and the company is now bankrupt. But it did seem like my particular division at least was making headway before the collapse at the top, so I can see it working.

 

[Martimus]

Originally posted by: Nemesis 1
AMD and Intel must I have come to an agreement. Because this does break the other agreement. Now if AMds 45nm is as efficient as stated. This could be interesting.

The timing of it tells me that perhaps AMD feels more comfortable with this arrangement now, since Intel's new processor is using a IMC at its core, which I believe is an AMD patent. So if they were to pull the liscense they would be cutting their own arm off as well. I don't know this at all, but I felt like speculating since that can be fun at times.

 

[rbk123]

Originally posted by: Viditor I would bet that we see a short squeeze here as well (already 10 million shares traded), whcih could really get this thing rising!

A short squeeze is not possible since the SEC banned all shorts a couple of weeks ago.

 

[Idontcare]

Originally posted by: rbk123

Originally posted by: Viditor I would bet that we see a short squeeze here as well (already 10 million shares traded), whcih could really get this thing rising!

A short squeeze is not possible since the SEC banned all shorts a couple of weeks ago.

SEC only banned short selling of a select few (and it really was a select few) publicly traded stocks in the financial sector. It was not a market-wide ban.

Originally posted by: Martimus
The timing of it tells me that perhaps AMD feels more comfortable with this arrangement now, since Intel's new processor is using a IMC at its core, which I believe is an AMD patent. So if they were to pull the liscense they would be cutting their own arm off as well. I don't know this at all, but I felt like speculating since that can be fun at times.

The timing is likely 100% related to AMD's timetable for kicking off 45nm production. Wanting to make it a clean starting point for the Foundry Co.

AMD does not own THE patent on IMC. Their implementation is covered by their patents, as Intel's implementation is covered by their own patents. Don't forget Intel had IMC since 386SL...AMD's IMC was not a new concept, just timely for the value-add it provided their product lineup at the time.

Originally posted by: Martimus
If this is all like the spin-off of Delphi (which I was a part of), it is more an effort by AMD to rid themselves of an unprofitable portion of their business. GM never intented Delphi to be profitable, nor did they care.

Oh I fully agree that AMD could care less (to an extent) whether the Foundry Co is profitable or survives any longer than AMD needs them to survive (TSMC HK/MG is 28nm in 2010, IBM is HK/MG 32nm in 2010, there are options)...but clearly the other party had to be convinced they were taking a winning position here.

I don't know who bought Delphi, they got duped and lost. But the Abu Dhabi side of this had to become confident this was going to make them money somehow.