No bottom in sight for AMD

[madh83]

Originally posted by: 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)

I actually like this idea of a spin-off too, it's something they should've done in the first place. Not spin-it off exactly, but after buying ATI let it operate on its own. Seems like ATI themselves would have done a better job of handling things given their past performance. Not to mention save AMD a crap-load on merger costs, although I never thought they should have bought them in the first place. Does anyone know what was Hector before becoming CEO? He seems to really lack foresight when it comes to the business aspect of AMD.

 

[myocardia]

Originally posted by: madh83
Does anyone know what was Hector before becoming CEO?

He was helping Motorola lose billions.

He seems to really lack foresight when it comes to the business aspect of AMD.

I'm starting to think he got his business degree from one of those online places that 60 Minutes exposes every year or two-- the type that requires no attendance of any classes, online or not.

 

[hans007]

Originally posted by: myocardia

Originally posted by: madh83
Does anyone know what was Hector before becoming CEO?

He was helping Motorola lose billions.

He seems to really lack foresight when it comes to the business aspect of AMD.

I'm starting to think he got his business degree from one of those online places that 60 Minutes exposes every year or two-- the type that requires no attendance of any classes, online or not.

i think his main problem was...

hector turned amd around, and then just stopped caring completely or planning to keep competing.

i guess in sports they call this "playing not to lose" instead of "playing to win".

that and he stupidly paid $5 + billion for ATI ... i think amd would be in reasonably good shape if they had not done that, seeing as ATI has done NOTHING for them.

ATI was losing money whenthey bough tthem, and is probably losing even more money now or at best operating operationally even as a unit. hell ati is probably losing even more money now, since they do not have high volume Intel chipset sales anymore as a revenue source.

one 5.4 billion dollar misstep. without that problem, amd would probably have still lost about abillion last year, but it wouldnt have been nearly as bad as losing 1.5 billion AND having 5 billion in loans.

so if amd dies, you can all blame hector and buying ATI

by the way amd stock hit $5.30 today. today was an UP day for the nasdaq overall unlike the last few days.

jus tto put that in perspective, that makes AMD worth 3.07 billion. it is worth less than how much it costs to build a state fo the art fab.

less than ATI was worth alone when they bought them. they are worth less than 1/8th of nvidia and less 1/40th of intel.

 

[Idontcare]

It is really hard to credit Hector with turning AMD around...and I suspect the only way we'd ever really know where to give credit that is due is to hear from an AMD'er that was there when Sanders was CEO as well as now that Hector is there.

Personally I always figured it was Sanders and Dirk Meyer who built the AMD that everyone nostalgicly recalls.

Sanders commissioned the acquisition of NexGen under his watch, thereby giving the company precious time to design out the K7 (also done under Sanders watch).

Dirk came from DEC to lead the K7 design. It was intended to go multi-core from day 1, or so AMD claimed many times. So that was not Hector's vision either.

So the way I see it Hector inherited a company that was alread well setup to do exactly what it did (take on Intel and the Netburst speed demon).

What was "managed" under Hector's watch was Barcelona/Phenom. It simply could not have been more work to take the existing K8 and create K10 in comparison to the work that was done in creating K7 from scratch...and yet they (management) bungled it apparantely and spent their billions on purchasing ATI instead of investing the money into supporting their design and R&D development teams.

It's called "losing focus" and it is villified for a reason.

Now what has Hector managed to do? You can argue he injected the necessary leadership to go after securing DELL as well as the many other tier-1 OEMs. Sander's could never quite pull that off and Dirk was not in the position to make those committments for AMD.

Also Hector did wine and dine whoever needed it in order to basically get a free fab or two out of the Dresden community (they did not end up in Dresden for no good reason).

So Sanders was the Mr Flashy type dude who sought the limelight, good attributes at times and bad at others. Dirk is the technocrat who all us engineers wish would run a company, of course the one that ran TI isn't doing such a great job.

But we hold lots of expectation when an engineer is in charge, not so much expectation when a lawyer or marketing dude makes CEO.

So did Hector really bungle anything? Or did he simply not do enough in comparison to what others were doing around him? Only an insider who was keenly aware of the internal timeline of when and who was making decisions would be able to tell us.

 

[wwswimming]

Originally posted by: keysplayr2003
Bill Gates could crack open one of his littler piggy banks, and buy AMD.

him & Warren Buffett could buy it just from
the interest on their bank accounts.

 

[Idontcare]

Originally posted by: wwswimming

Originally posted by: keysplayr2003
Bill Gates could crack open one of his littler piggy banks, and buy AMD.

him & Warren Buffett could buy it just from
the interest on their bank accounts.

But there are superior and more deserving options for that cash to be spent on...

Having buttloads of money does not alleviate the necessity of continuing to invest wisely.

 

[v8envy]

As Idontcare pointed out, you don't become a billionare by doing wacky stuff with your money just because you can.

I'd also like to remind people again that anyone interested in AMD's assets doesn't need to buy the whole company -- debt, overhead, Hector's golden parachute and all. If things look grim they can just hang out, wait, and acquire just the assets and leave the debt and overhead ridden carcass behind. Even AMD's name is a purchasable asset.

As far as AMD obtaining new funding for operations once things look grim -- let me try an analogy on you. Your officemate Bob asks you to loan them 10 bucks. No problem right? A few months later you see Bob on the street, dressed in rags and covered in vomit, urine and feces. Would you be as likely to loan him 10 bucks then?

Just because investors were lining up hand AMD cash the past doesn't mean they're so eager now. Plus, any new investors would be diluting the existing ones something fierce at these stock prices. Not a good option for funding operations at all. Which leaves short term commercial paper at insane junk bond level interest rates. Not a pretty picture.