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"AMD Moves Away From PCs Amid Steep Losses"

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xmonger said:
Thanks for the reply. I decided to make an investment in AMD and bought the stock as a value play. I think the stock is extremely oversold at this point and represents a great opportunity to get in at a rock bottom price. The GPU part of the business is estimated to be worth $2.25/share on its own while the whole company is trading at $2.18. The CPU part of their business has significant value. Right now everyone is heading for the doors, but when things settle down there will be a rush back in. Mark this post and come back to it in 6 months.

Further, when you buy/sell options it is a short term trading strategy not an investment. You have to be right on the timing and direction to make money. This is much more difficult, plus it's a leveraged derivative so Vegas is a better bet.
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Shorting AMD would be a good play.
 
cytg111 said:
quick win would be getting an x86 chip to the tablet/phone market with an arms tdp. Seeing how amd is the only one with an x86 license and all...
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Problem is AMD already screwed up in that area. Cancelling Krishna and Wichita.

They aint exactly helping themselves.
 
ShintaiDK said:
Problem is AMD already screwed up in that area. Cancelling Krishna and Wichita.
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Krishna and Wichita were replaced by Temash and Kabini. They were never meant to go into phones anyway and neither are their replacements. It's still netbook/tablets/hybrids, so that gap is still filled but it's just a year late.

That's basically been the story of AMD the past several years 😛
 
ExarKun333 said:
Shorting AMD would be a good play.
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At $2-ish the upside of shorting is fairly limited. The downside is not. There's still a chance some miracle might occur. There are likely reasons the board of directors hasn't voted to just end operations and liquidate, they think there's still a possibility of yielding a return on current assets.

I use options to avoid falling into the already mentioned value trap. If I think 1000 shares are worth buying for $2,180 as a gamble on a return to viability that forces me to step back analyze, set targets and at least mull over a strategy.

In this case the my reasoning would go like this: "Ok, if they're not viable in 2 years they're definitely gone." I put a time limit on my gamble, and instead plonking down for the whole 100k shares I buy 500 bucks worth of January 2014 calls with a strike price not far from where it's trading today. If AMD pulls a rabbit out of its hat and price spikes, I still get to participate in the move. I can even short calls along the way. If AMD goes chapter 11 Ive lost at most 1/4 of what I'd have lost if I bought the stock outright.

For a risky "investment" like AMD looks today it's a much better way to optimize risk/return, IMO.
 
2is said:
Few people buy tablets as laptop replacements, and pretty much no one buys them as desktop replacements. They are great for what they are and based on your post history and love affair with ARM, I don't think you actually know where they excel and where they fall short.
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that's now, companies are thinking atleast 8 months ahead minimum.
 
v8envy said:
At $2-ish the upside of shorting is fairly limited. The downside is not. There's still a chance some miracle might occur. There are likely reasons the board of directors hasn't voted to just end operations and liquidate, they think there's still a possibility of yielding a return on current assets.

I use options to avoid falling into the already mentioned value trap. If I think 1000 shares are worth buying for $2,180 as a gamble on a return to viability that forces me to step back analyze, set targets and at least mull over a strategy.

In this case the my reasoning would go like this: "Ok, if they're not viable in 2 years they're definitely gone." I put a time limit on my gamble, and instead plonking down for the whole 100k shares I buy 500 bucks worth of January 2014 calls with a strike price not far from where it's trading today. If AMD pulls a rabbit out of its hat and price spikes, I still get to participate in the move. I can even short calls along the way. If AMD goes chapter 11 Ive lost at most 1/4 of what I'd have lost if I bought the stock outright.

For a risky "investment" like AMD looks today it's a much better way to optimize risk/return, IMO.
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Agreed ...

But the worst thing that is going to come is that some private equity guys buys AMD for cheap, spin-off ATI operation for about 2-billion, and extort intel on the x64 bit cross-licensing deal for another 2-billion settlement. And then sell the rest of the IP's for another couple hundred million 🙁
 
v8envy said:
There are likely reasons the board of directors hasn't voted to just end operations and liquidate, they think there's still a possibility of yielding a return on current assets
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Among those reasons there could be vanity, pride, ego... the decision isn't strictly rational. The best decision could be or could have been to liquidate the company, but the board didn't and may not go for this in the future. They may go down with the ship. And I think they will go that way.

AMD strategy is fundamentally flawed. Trinity is a huge chip for the market bracket it is in, so is Bulldozer, and they are stuck with both chips and its future derivatives for at least three years, so it's just a question of whether they can survive until they can field something with better economics. But how they can develop better chips with less cash and smaller engineering teams than they had in the past?
 
wenboy said:
Agreed ...

But the worst thing that is going to come is that some private equity guys buys AMD for cheap, spin-off ATI operation for about 2-billion, and extort intel on the x64 bit cross-licensing deal for another 2-billion settlement. And then sell the rest of the IP's for another couple hundred million 🙁
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The agreement is something like that:

You have access to my IP and I have to yours, but one of us is bought, declare bankruptcy or cease to exist, this side loses access to all patents covered by this agreement the other receives unlimited, free rights of use to the patents covered by the agreement.

So AMD is essentially locked up from any agreement that implies change of ownership or ceasing to be an independent company, or even of declare bankruptcy. Once it does, Intel receives the x64 patents for itself and AMD loses access to every single x86 patent out there.
 
wenboy said:
Agreed ...

But the worst thing that is going to come is that some private equity guys buys AMD for cheap, spin-off ATI operation for about 2-billion, and extort intel on the x64 bit cross-licensing deal for another 2-billion settlement. And then sell the rest of the IP's for another couple hundred million 🙁
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Hmmmm, wrong on every point. 😵
 
Agent11 said:
Trinity is very strong in its segment of the market, I wouldn't be too worried.
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Oh, add to that the fact that AMD yields are worse than Intel yields. That's why you see that crappy gross margins.

Question, when Haswell arrives, what do you think that will happen with AMD gross margins and cash flow?
 
Have you seen any benchmarks of Intel graphics solutions? You would have to be a sadist to recommend them.
 
Agent11 said:
I live in Oregon, and I wish Haswell luck... But I would never bet on an Intel graphics solution. Ever.
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What does this had to do with Trinity economics? Nobody is paying too much for Trinity graphics prowess and because of that AMD margins are in the toilet. The fact that YOU don't trust Intel graphics is irrelevant.
 
Not my point. Never underestimate Intel. Ever. Their graphics processors are pale in comparison to say AMD's fusion solutions or Nvidia's Tegra series, but that doesn't mean Intel hasn't come a very long way in this dept. Don't underestimate them and that is advice ANY company would do well to follow.
 
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