AMD overoptimistic?

[trajan2050]

http://biz.yahoo.com/ap/071217/amd_mover.html?.v=1

Yeung said AMD's problems opened an opportunity for competitor Intel Corp. to add market share in high-margin notebook and server chips.

He noted AMD raised its 2008 guidance above current analyst consensus and said the company's estimates were "overly optimistic" and built on "unrealistic assumptions."
Its shares fell 32 cents or 3.6 percent to a 52-week low of $8.11. Shares had traded between $8.42 and $23 over the past year.

 

[Nemesis 1]

Well considering their stock just slid into the $7 area. Its good times for me a smell a great payday coming soon. AMD has been putting out nothing but overly optimistic and unrealistic assumptions." For over 11/2 years now. Their recent guidance was way better but still way to much fluff.

 

[o1die]

Actually, might be a good time to buy amd stock, with a possible buyout in the not too distant future. But it's a crapshoot.

 

[Nemesis 1]

I shorted AMD @ $39 and change. I will wait for the bottom . Which will likely arrive when AMD files chapter 11. I never ever bought an AMD product other than ATI . But I get I nice payday from AMD as they lived up to my expectations.

 

[v8envy]

Bottom fishing based on price movement alone is a sure way to lose your shirt.

Do you know for a fact any buyer of AMD would retain the license to make x86 processors? Without that ability AMD is not worth a huge amount more than liquidation value for physical assets and remaining IP. I'm not sure that'd be enough to pay current debts, leaving precious little to buy as a whole company. Anyone wanting the IP is better off vulturing until the company finishes the death spiral and aquiring just the assets without the overhead or liabilities of the whole company.

You're welcome to do your own research to buy whatever you want whenever you want, but without any good news or technicals showing a bottom you're catching a falling knife. Yes, you could get lucky and buy at the exact moment the stock turns around, but odds are very much against you. You quite literally have better odds placing 20% of your investment capital on 'red' in Vegas.

 

[SickBeast]

If AMD goes bankrupt and has its IP purchased (similar to the 3DFX/nVidia thing), what becomes of the shareholders? Do they lose everything?

 

[trajan2050]

In bankruptcy shares are generally but not always worthless. Shareholders are last in line behind secured creditors, and various categories of bondholders, of which AMD has many.
In AMD's case bankruptcy would almost certainly render the stock worthless.

 

[NXIL]

If AMD goes bankrupt and has its IP purchased (similar to the 3DFX/nVidia thing), what becomes of the shareholders? Do they lose everything?

Generally, yes. look what happened at United Airlines: all their outstanding stock shares became utterly worthless.

 

[SickBeast]

I really wonder what AMD is gonna do at this point.

They are forced to sell the Phenoms at $200 each. Are they making profit at this price?

I know they've been losing money selling the X2's at $60-70. I figure that Phenom is around twice the die size of an X2, so: at $120-140 or so, they either break even or lose money. At $200 they make some, but they have a helluva lot of engineering to pay for on a new chip like that.

There's not much AMD *can* do at this point. It's a shame; Fusion looks like a unique product unlike anything intel or nVidia would or could pull off. Hopefully AMD can last long enough for the project to make it out the door.

 

[exar333]

This really isn't a suprise to anyone. Their CPUs are mediocre, their GPUs are mediocre, and their chipsets are mediocre. In a free-market economy, they are doomed to suffer with poor products.

The funny thing is how the PR guys/gals take center stage when products fall short. AMD needs to steal some Intel people who worked in PR during the Proscott years. Maybe that will help!

"The chip runs incredibly hot, but we find it decreases reliance on space-heaters in cold climates"

or

"The chip encodes slower, but our customer base appreciates this as it gives them more time with their families."

 

[ViRGE]

Originally posted by: SickBeast
I really wonder what AMD is gonna do at this point.

They are forced to sell the Phenoms at $200 each. Are they making profit at this price?

I know they've been losing money selling the X2's at $60-70. I figure that Phenom is around twice the die size of an X2, so: at $120-140 or so, they either break even or lose money. At $200 they make some, but they have a helluva lot of engineering to pay for on a new chip like that.

There's not much AMD *can* do at this point. It's a shame; Fusion looks like a unique product unlike anything intel or nVidia would or could pull off. Hopefully AMD can last long enough for the project to make it out the door.

It depends on your definition of "losing." They're never AFAIK losing money on a chip if you're talking about (sale price) - (direct manufacturing costs), but it seems very likely that they are losing money with both the X2s and Phenoms if we're talking about also factoring in administration, R&D, marketing, etc. In other words, things that aren't directly required to make the processor and generally are a fixed cost no matter how many units you make.

AMD as a company is losing money, and the revenue from their processors isn't high enough to offset the fixed costs. It's the classic marginal cost/marginal revenue problem, where in the short-term you're losing money on the whole but you're still better off manufacturing things than closing down shop entirely.

 

[formulav8]

I honestly would not expect them to file chapter 11 within the next two years. They have a guaranteed $2 Billion Dollars to work with from some financial company. That should keep them going for awhile. Just my penny.


Jason

 

[spikespiegal]

This really isn't a suprise to anyone. Their CPUs are mediocre, their GPUs are mediocre, and their chipsets are mediocre. In a free-market economy, they are doomed to suffer with poor products.

I thought you were talking about Intel there for a minute. I guess somebody needs to take a Dual core Netburst Xeon and shove the pins in your forehead until you get a reality check.

"The chip runs incredibly hot, but we find it decreases reliance on space-heaters in cold climates"

Again, are you talking about AMD, or Intel? Most of the data centers I work in are still up to the ceiling in leased Netburst P4's that can be replaced by Opterons that consume less power, produce much less heat, and consume a lot less power.

 

[demiurge3141]

Originally posted by: spikespiegal

This really isn't a suprise to anyone. Their CPUs are mediocre, their GPUs are mediocre, and their chipsets are mediocre. In a free-market economy, they are doomed to suffer with poor products.

I thought you were talking about Intel there for a minute. I guess somebody needs to take a Dual core Netburst Xeon and shove the pins in your forehead until you get a reality check.

"The chip runs incredibly hot, but we find it decreases reliance on space-heaters in cold climates"

Again, are you talking about AMD, or Intel? Most of the data centers I work in are still up to the ceiling in leased Netburst P4's that can be replaced by Opterons that consume less power, produce much less heat, and consume a lot less power.

Heh? Are we in 2005?

 

[spikespiegal]

Heh? Are we in 2005?

I realize that this forum is dedicated to people who think over-clocking is what you do to make a 2U perform like a 4U server, and what color LED fans work best in a Alienware cases.

Those of us who were forced to choose a few hundreds of thousands of dollars worth of Netburst *garbage* in the past couple of years that's still on lease because Intel delayed the Core Duo architecture as much as possible aren't exactly hating on AMD.

 

[demiurge3141]

Originally posted by: spikespiegal

Heh? Are we in 2005?

I realize that this forum is dedicated to people who think over-clocking is what you do to make a 2U perform like a 4U server, and what color LED fans work best in a Alienware cases.

Those of us who were forced to choose a few hundreds of thousands of dollars worth of Netburst *garbage* in the past couple of years that's still on lease because Intel delayed the Core Duo architecture as much as possible aren't exactly hating on AMD.

and intel did suffer and lost some server market to amd.

 

[harpoon84]

Originally posted by: spikespiegal

Heh? Are we in 2005?

I realize that this forum is dedicated to people who think over-clocking is what you do to make a 2U perform like a 4U server, and what color LED fans work best in a Alienware cases.

Those of us who were forced to choose a few hundreds of thousands of dollars worth of Netburst *garbage* in the past couple of years that's still on lease because Intel delayed the Core Duo architecture as much as possible aren't exactly hating on AMD.

Dude, it's 2007, nearing 2008. Time to get over Netburst... seriously!

 

[v8envy]

Originally posted by: spikespiegal

Those of us who were forced to choose a few hundreds of thousands of dollars worth of Netburst *garbage* in the past couple of years that's still on lease because Intel delayed the Core Duo architecture as much as possible aren't exactly hating on AMD.

Not Intel's problem your purchasing only allowed you to lease hardware from Dell. Even in 2005 you could get 4 way Opteron server boxes from Sun. Heck, you could do that in 2004!

Blame your organization's purchasing inflexibility or your CTO's lack of weight for having to plumb your server room for more wattage, not Intel.

 

[dmcowen674]

Originally posted by: ExarKun333
This really isn't a suprise to anyone.

Their CPUs are mediocre, their GPUs are mediocre, and their chipsets are mediocre.

In a free-market economy, they are doomed to suffer with poor products.

Yep, the world will be a better place with one CPU manufacturer.