No bottom in sight for AMD

[LOUISSSSS]

damn did Intel fall this much percentage-wise when they were getting smacked around with the AMD Athlon 64 vs the Pentium 4?

 

[BlueAcolyte]

Don't believe so... We did some kind of stock market game two years ago in school and AMD was over $20.00... Man, good times.

 

[brxndxn]

I'll just keep buying more AMD..

Wall Street wants to see today's numbers kick ass... they value stock based on next quarter.. The chip industry is 2-5 years from R&D to product.

I think with AMD, there are a lot of positives in this negative situation..

AMD, with the right management, could turn profit even with inferior processors.. Their graphics market owns the 'sweet spot' at $150-200. Nvidia only has graphics and still manages to make a profit.

AMD is known as one of the best companies to work for.. that is why they have better engineers.. and that is why they can still compete against Intel with 1/10 the research budget. They put their employees first.. shareholders second..

As a shareholder, I do not mind that. I believe in the long run AMD is positioned better than Intel and Nvidia.. But AMD has to suffer now in order to compete harder in the future.

 

[BladeVenom]

Ok, their processors aren't competing well on high end desktops. But their latest video cards look like they are selling well. The best selling console, Wii, uses an ATI chip. The second best selling console, Xbox 360, also uses an ATI chip. How come they aren't making a lot of money?

 

[Idontcare]

Originally posted by: v8envy

Originally posted by: Idontcare

A recession should do more damage to Intel as they stand to lose a greater percentage of lucrative high-margin sales by the forthcoming tight-fisted consumers versus AMD whose existing products (low ASPs) are likely to be "less unfavored".

I would think Apple, whose product mix is dominated by high-end sales, stands to have their financials impacted even more so than Intel's.

Online pr0n and beer brewers should do just fine though.

Exactly the opposite -- recessions hit the 'average joe' in the wallet, not so much people who aren't working for a living. Apple's products fit more into the 'luxury item' niche than basic computing. People are and will continue forking over for that.

Both companies are going to be impacted. I doubt Intel will take a higher % hit in the server space. Or the desktop space. Or mobile space. A few tens of dollars isn't going to make a big difference to the consumer -- the decision will be 'buy or not buy', not "hmm I can save twenty bucks by going with this Phenom thing I've been hearing so many terrible things about..."

People who buy Macs are not insulated from job security issues that recessions introduce.

Apple stock down 7.64% today. http://finance.yahoo.com/q?s=AAPL

Intel stock down 8.11% today. http://finance.yahoo.com/q?s=INTC

AMD stock donw 7.68% today. http://finance.yahoo.com/q?s=AMD

I do not see any evidence here that the market expects Apple to be insulated from whatever bad mojo is expected to befall Intel or AMD.

 

[Fox5]

Originally posted by: brxndxn
I'll just keep buying more AMD..

Wall Street wants to see today's numbers kick ass... they value stock based on next quarter.. The chip industry is 2-5 years from R&D to product.

I think with AMD, there are a lot of positives in this negative situation..

AMD, with the right management, could turn profit even with inferior processors.. Their graphics market owns the 'sweet spot' at $150-200. Nvidia only has graphics and still manages to make a profit.

AMD is known as one of the best companies to work for.. that is why they have better engineers.. and that is why they can still compete against Intel with 1/10 the research budget. They put their employees first.. shareholders second..

As a shareholder, I do not mind that. I believe in the long run AMD is positioned better than Intel and Nvidia.. But AMD has to suffer now in order to compete harder in the future.

The roadmaps are the most telling thing, imho.
AMD's shortterm roadmaps have replaced barcelona across the board to cheap X2's.
AMD's long term roadmaps are pushed back further, with X2 revisions standing in place.
AMD's basically going back to the days of the K6. They're going to start grabbing market share with low prices, but the ATI devision of that company is likely to be the only thing making money for a loooongg time.

But their latest video cards look like they are selling well. The best selling console, Wii, uses an ATI chip. The second best selling console, Xbox 360, also uses an ATI chip. How come they aren't making a lot of money?

ATI is, it's just the cpus are sooo much more expensive. BTW, the console designs are only licensed from ATI, so they don't make very much money on each one at all. Most of the money was paid up front, so they got the hundred million or billion or whatever to make the design, now they're probably lucky if they see a few million a year from licensing fees.

 

[Nemesis 1]

Originally posted by: BladeVenom
Ok, their processors aren't competing well on high end desktops. But their latest video cards look like they are selling well. The best selling console, Wii, uses an ATI chip. The second best selling console, Xbox 360, also uses an ATI chip. How come they aren't making a lot of money?

Ati did The MS chip but to MS spec. Also MS has their chips built themselves. Ati doesn't get anything from MS now.

 

[hans007]

Originally posted by: brxndxn
I'll just keep buying more AMD..

Wall Street wants to see today's numbers kick ass... they value stock based on next quarter.. The chip industry is 2-5 years from R&D to product.

I think with AMD, there are a lot of positives in this negative situation..

AMD, with the right management, could turn profit even with inferior processors.. Their graphics market owns the 'sweet spot' at $150-200. Nvidia only has graphics and still manages to make a profit.

AMD is known as one of the best companies to work for.. that is why they have better engineers.. and that is why they can still compete against Intel with 1/10 the research budget. They put their employees first.. shareholders second..

As a shareholder, I do not mind that. I believe in the long run AMD is positioned better than Intel and Nvidia.. But AMD has to suffer now in order to compete harder in the future.

i dont think AMD will just disappear.

they will become part of someone else , when they declare bankruptcy and their parts are bought up to pay creditors.

that said, i would not want to own their stock , as their only real hope now is that someone buys them or that somehow tommorrow 45nm quad core barcelonas magically start appearing and work 100% perfect and run at 4.5 ghz.

 

[rchiu]

Originally posted by: hans007

Originally posted by: brxndxn
I'll just keep buying more AMD..

Wall Street wants to see today's numbers kick ass... they value stock based on next quarter.. The chip industry is 2-5 years from R&D to product.

I think with AMD, there are a lot of positives in this negative situation..

AMD, with the right management, could turn profit even with inferior processors.. Their graphics market owns the 'sweet spot' at $150-200. Nvidia only has graphics and still manages to make a profit.

AMD is known as one of the best companies to work for.. that is why they have better engineers.. and that is why they can still compete against Intel with 1/10 the research budget. They put their employees first.. shareholders second..

As a shareholder, I do not mind that. I believe in the long run AMD is positioned better than Intel and Nvidia.. But AMD has to suffer now in order to compete harder in the future.

i dont think AMD will just disappear.

they will become part of someone else , when they declare bankruptcy and their parts are bought up to pay creditors.

that said, i would not want to own their stock , as their only real hope now is that someone buys them or that somehow tommorrow 45nm quad core barcelonas magically start appearing and work 100% perfect and run at 4.5 ghz.

What makes you think AMD is gonna declare bankruptcy. They are not doing well, but it's not like it's the first time. Back in the days, most of the OEM like HP, Dell, Toshiba, IBM all refused to put AMD in their PC's and AMD still survived. Now even though they don't have the best product, their relationship with major PC makers are much better. In addition, AMD chips are much more accepted in the business world today.

AMD is losing money now, yes, but looking at Intel's strategy lately, they are not looking to start another price war. Instead, Intel is delaying its product and maintain current pricing. So AMD will still able to compete, with a decent margin. AMD also improved their margin last quarter and their loss is a little more manageable.

Finally, even if AMD continue to lose money, they can still sell ATI and get some cash in the worst case. They won't get the 5 billion they paid for, but they can still get 2~3 billion and that will keep their business going for a few years longer.

I am watching AMD stock closely. Lately the semi-industry/overall macro economy driven stock price drop is making AMD stock a bargain. I'd definitely jump on it if AMD stock get close to $5 and their next quarter report looks half way decent.

 

[myocardia]

Originally posted by: rchiu
What makes you think AMD is gonna declare bankruptcy.

Maybe the fact that they haven't made a profit in a very long time?

Finally, even if AMD continue to lose money, they can still sell ATI and get some cash in the worst case. They won't get the 5 billion they paid for, but they can still get 2~3 billion and that will keep their business going for a few years longer.

They've already admitted that they overpaid massively for ATI: ouch.

 

[rchiu]

Originally posted by: myocardia

Originally posted by: rchiu
What makes you think AMD is gonna declare bankruptcy.

Maybe the fact that they haven't made a profit in a very long time?

Finally, even if AMD continue to lose money, they can still sell ATI and get some cash in the worst case. They won't get the 5 billion they paid for, but they can still get 2~3 billion and that will keep their business going for a few years longer.

They've already admitted that they overpaid massively for ATI: ouch.

They made $134 million in the quarter ended Oct. 2006. That's only a littler over a year ago and I wouldn't call it "a very long time".

And overpaying for ATI yes, but doesn't mean ATI is worthless. I already said they won't get the 5 billion back, but pretty sure ATI still worth at least 2~3 Billion.

 

[myocardia]

Originally posted by: rchiu
They made $134 million in the quarter ended Oct. 2006. That's only a littler over a year ago and I wouldn't call it "a very long time".

In the business world, 6 quarters ago is a very long time. Why do you think their stock price is 1/6 of what it was when they were making profits?

And overpaying for ATI yes, but doesn't mean ATI is worthless. I already said they won't get the 5 billion back, but pretty sure ATI still worth at least 2~3 Billion.

No, ATI isn't worthless. But do you think AMD could survive a 2-3 Billion $ loss? Of course, that isn't going to happen, since ATI is the only portion of AMD that's actually making a profit at the moment. I can't see them selling their only profitable division.

 

[rchiu]

Originally posted by: myocardia

Originally posted by: rchiu
They made $134 million in the quarter ended Oct. 2006. That's only a littler over a year ago and I wouldn't call it "a very long time".

In the business world, 6 quarters ago is a very long time. Why do you think their stock price is 1/6 of what it was when they were making profits?

And overpaying for ATI yes, but doesn't mean ATI is worthless. I already said they won't get the 5 billion back, but pretty sure ATI still worth at least 2~3 Billion.

No, ATI isn't worthless. But do you think AMD could survive a 2-3 Billion $ loss? Of course, that isn't going to happen, since ATI is the only portion of AMD that's actually making a profit at the moment. I can't see them selling their only profitable division.

A little over one fiscal year is not a very long time in any business. Plenty of businesses have one or even two bad year and turn it around. And selling ATI at 2-3billion loss is not gonna be an actual lost. The cash is already spent, and any cash they get from the sell is gonna be cash infusion into their operations. This is like the write-off they just had regarding the purchase of ATI, it's not gonna be a loss in their income statement, it's just gonna be a write off. And last qtr (ended Sept 2007) the graphic division lost 3 million on 252 million sales. Their CPU division lost 112 million on 1.28 billion sales. ATI is pretty insignificant in terms of sales and profit. If AMD is desperate, they will and should certain sell ATI to preserve their main CPU business.

 

[wwswimming]

Originally posted by: Pocatello
I'm pretty sure some companies are looking to buy AMD right now, especially the Asian ones, they have the cash. The price is not right yet.

there's a lot of countries (and investor groups, and
wealthy people) with dollars, who have watched
their dollars lose about 40% of their value in the
last 5 years.

by buying AMD shares, they trade in a commodity
(or, as the border control guys say, "financial instrument")
that has no upside in the foreseeable future, for a
piece of the #2 CPU company.

any of them that have thoughts of buying AMD
know that, it's a "you snooze, you lose" situation.
waiting for the dollar to fall more, or AMD to fall
more, is secondary to real time wheeling & dealing -
AMD is very affordable right now.

i wouldn't be surprised to see AMD have a new
owner sometime in the next 6 months.

 

[Keysplayr]

Bill Gates could crack open one of his littler piggy banks, and buy AMD.

 

[BlueAcolyte]

There was an article on TGDaily about this... They said something about Samsung taking on Intel and Nvidia.

If AMD survives, Fusion better kick ass.

 

[myocardia]

Originally posted by: rchiu
A little over one fiscal year is not a very long time in any business.

That would be why their stock price is so high right now?

And selling ATI at 2-3billion loss is not gonna be an actual lost. The cash is already spent, and any cash they get from the sell is gonna be cash infusion into their operations.

You must not know much about AMD. They had to borrow the money to buy ATI. If they sell it for ~half of what they paid for it, then they still owe what's left on the loan. That money won't be going into their pocket/bank account, it will go toward paying off said loan.

And last qtr (ended Sept 2007) the graphic division lost 3 million on 252 million sales.

Okay, it doesn't seem like you know much about ATI, either. The Q3 numbers include zero 3850 or 3870 sales. Of course they lost a bit of money, on not very many sales-- the people who needed a faster video card bought an nVidia card (like myself), or just "toughed it out" with their older ATI card. The 3850 and 3870 cards seem to be ATI's best selling card launch ever, or at least tied with their previous best launch. Let me know in a few months which division of AMD made a profit, and which continued to lose money; the division in the red definitely won't be the video card division.

 

[v8envy]

So, I was a bit wrong about the bounce back to 6.50 the day I made that prediction -- the stock did bottom for the day shortly after my prediction, but didn't trend up high enough to get over 6.20 or so.

Now that we're approaching my $5.10 target my anticipated reversal pattern on the chart didn't form. The chart looks as bad as ever, if not worse. Yup, gonna eat some crow and un-predict the $5.10 bottom. Too early to call one until I see the stock trading in a range for at least a week or two. Which may *still* happen as a result of not being able to short < $5 stocks, but isn't in progress yet.

The OP may have been right after all.

 

[madh83]

Originally posted by: myocardia

Originally posted by: rchiu
A little over one fiscal year is not a very long time in any business.

That would be why their stock price is so high right now?

And selling ATI at 2-3billion loss is not gonna be an actual lost. The cash is already spent, and any cash they get from the sell is gonna be cash infusion into their operations.

You must not know much about AMD. They had to borrow the money to buy ATI. If they sell it for ~half of what they paid for it, then they still owe what's left on the loan. That money won't be going into their pocket/bank account, it will go toward paying off said loan.

And last qtr (ended Sept 2007) the graphic division lost 3 million on 252 million sales.

Okay, it doesn't seem like you know much about ATI, either. The Q3 numbers include zero 3850 or 3870 sales. Of course they lost a bit of money, on not very many sales-- the people who needed a faster video card bought an nVidia card (like myself), or just "toughed it out" with their older ATI card. The 3850 and 3870 cards seem to be ATI's best selling card launch ever, or at least tied with their previous best launch. Let me know in a few months which division of AMD made a profit, and which continued to lose money; the division in the red definitely won't be the video card division.

I agree with your last statement exactly! I should add that regarding your 2nd statement though, if they do sell off ATI, it would still add to their current cash on hand. They would still be paying the loans in the previously set schedule. No reason to pay back the entire loan at once, unless their debt structure was very odd and it actually benefited them. Still, this is a really tough time for AMD, I don't think they're going bankrupt though. If they really were to run out of cash for operations they could get another major investor, from the middle east or elsewhere. Until they do some major shuffling though, I doubt we will see a return to the glory days.

 

[formulav8]

I don't see them selling off ATI. I can see them getting rid of Hector. In my opinion he had his chance and failed.

The last I heard AMD still has a 1 year advantage on Intel as far as releasing a Fusion product. IF they end up releasing it on time, then that could really help them out in the money maker areas of computing.

Anyways, AMD has plenty of cash that they can still get. I forgot the firm but they promised AMD more than 2 Billion dollars over the next 2 years if they needed it.

A buy out would be somewhat interesting though? My Intel stock may go down but my AMD may go up if that happens



Jason

 

[myocardia]

Originally posted by: madh83
I agree with your last statement exactly! I should add that regarding your 2nd statement though, if they do sell off ATI, it would still add to their current cash on hand. They would still be paying the loans in the previously set schedule. No reason to pay back the entire loan at once, unless their debt structure was very odd and it actually benefited them.

Haha, extremely good point. Even if they applied 100% of the selling price of ATI toward their loan, then their payments would halve. And if they kept ~50% of the selling price, they'd then have lower payments, along with a $1-1.5 billion cash infusion, which would probably be the preferred way to handle it, rather than keeping all of the cash for Hector to steal. I obviously didn't think about that reply long enough, before posting it. Thanks for correcting me, I need it sometimes.:Q

 

[Idontcare]

Originally posted by: myocardia

Originally posted by: madh83
I agree with your last statement exactly! I should add that regarding your 2nd statement though, if they do sell off ATI, it would still add to their current cash on hand. They would still be paying the loans in the previously set schedule. No reason to pay back the entire loan at once, unless their debt structure was very odd and it actually benefited them.

Haha, extremely good point. Even if they applied 100% of the selling price of ATI toward their loan, then their payments would halve. And if they kept ~50% of the selling price, they'd then have lower payments, along with a $1-1.5 billion cash infusion, which would probably be the preferred way to handle it, rather than keeping all of the cash for Hector to steal. I obviously didn't think about that reply long enough, before posting it. Thanks for correcting me, I need it sometimes.:Q

To sell something there must be a demand for it. Who would buy ATI should AMD try and sell it?

Or are you thinking spin-off? (new public stock listing, sell shares to investors, etc)

 

[myocardia]

Originally posted by: Idontcare
To sell something there must be a demand for it. Who would buy ATI should AMD try and sell it?

Intel was looking for a graphics manufacturer not very long ago, after AMD bought ATI. Also, any other company with a few billion to spare might become interested, should it go on the auction block.

Or are you thinking spin-off? (new public stock listing, sell shares to investors, etc)

No, I actually didn't think of that at all, but it may very well be the best option. ATI has a good name, especially to the average Joe. It actually makes alot more sense than selling ATI outright would make, if you ask me.

 

[TC777]

The article also shows Intel leading the way for losses. So I guess there is no bottom in sight for them either huh.

 

[Fox5]

Originally posted by: myocardia

Originally posted by: Idontcare
To sell something there must be a demand for it. Who would buy ATI should AMD try and sell it?

Intel was looking for a graphics manufacturer not very long ago, after AMD bought ATI. Also, any other company with a few billion to spare might become interested, should it go on the auction block.

Or are you thinking spin-off? (new public stock listing, sell shares to investors, etc)

No, I actually didn't think of that at all, but it may very well be the best option. ATI has a good name, especially to the average Joe. It actually makes alot more sense than selling ATI outright would make, if you ask me.

Spinning off ATI would very likely create a company worth more than the combined deal.