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Advanced Micro Devices, Inc. Message Board

  • CorporateRobot CorporateRobot Jan 24, 2009 1:55 PM Flag

    Why I bought AMD

    1) Although bankruptcy is possible, it is unlikely. AMD has a good deal of "intellectual" property that would make them an acquisition target if things get much worse.

    2) Generally, the biggest risk provides the biggest rewards. All of my "solid" stocks have lost so much anyway, why not speculate with a small amount?

    3) I have always liked their processors and the ATI graphics products. I do believe they probably paid too much for ATI, but that is not unusual. DOW is paying too much for ROH but they still think it is better for their long term.

    4) I think the Foundry idea is a good one that could make a nice symbiotic relationship: AMD needs money, middle east oil tycoons have money. AMD has good designs, but perhaps they are not as efficient at manufacturing.

    5) Viable businesses can operate in the red for long periods of time. Twenty years ago I worked for a company that was bought out by Siemens. When they bought us the business plan stated that they expected to lose money for ten years! We became profitable after 7 or 8 years and everyone in the company got a bonus.

    6) I listened to the conference call last week and there were some good questions from big brokers. This tells me that some big players are still interested.

    Don't get me wrong. I know this is a speculative play. I'm just willing to take the risk with this particular company at this particular time. I consider it a trade rather than an investment. That said, it may be an 18 month trade rather than an 18 day trade.

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    • "AMD has good designs, but perhaps they are not as efficient at manufacturing"
      AMD designs are second best and therefore inferior and unprofitable. Doesn't take a genius to figure that out. That is a major factor why they are having to sell out to Abu Dhabi in the first place. But I agree with the last half of your statement. But how on earth will selling out to Abu Dhabi help that. Abu Dhabi initially will own 65.8% of the fabs and that will increase as they contribute more money to fab development and the plan is for The Foundry in time to become just another foundry to serve other companies not necessarily AMD. AMD's plan is to become a fabless company that will acquire processors from foundries and not necessarily from Abu Dhabi. Guess what? Bagholder interest through ownership in AMD stock of the foundry company WILL BE DILUTED and Bagholders will be left holding another bag.


      “When they bought us the business plan stated that they expected to lose money for ten years! “
      AMD has been losing money for over 30 years!

      “there were some good questions from big brokers”
      You mean from Jo Anne Feeney?

      “know this is a speculative play”
      1000 to 1 at the track is speculative too. But who knows Allah may smile on you. Good luck!

    • 1. If AMD loses its x86 license, what value does its intellectual property have?

      2. Generally, the biggest risk is a total loss. It only provides a big reward in rare cases. That's why it's a big risk.

      3. They paid way way way too much for ATI and have lost almost all of it already. If you like them that's fine, but you should like Intel's products better, because they are better.

      4. Why can't AMD get money from middle east oil tycoons without giving up three times as much in assets?

      5. Viable companies have cash and consistency and little debt. AMD is almost all debt and no cash and you can never tell what they will mess up next.

      6. The $700 billion loss on Wall Street means that they may be big players but it doesn't mean they are smart players.

      AMD isn't a lottery ticket. A lottery pays someone who bought a ticket if it isn't you. Nobody is going to win on AMD.

      Plus

    • Bad move....

      "1) Although bankruptcy is possible, it is unlikely. AMD has a good deal of "intellectual" property that would make them an acquisition target if things get much worse."
      Most of AMD's IP in their chips belongs to Intels, the licensing agreement specifically states that they cannot undergo a change of ownership nor can they go bankrupt and retain the x86 license.

      "2) Generally, the biggest risk provides the biggest rewards. All of my "solid" stocks have lost so much anyway, why not speculate with a small amount?"
      There's risk, playing blackjack in Vegas, and then there is AMD a sure loser.

      "3) I have always liked their processors and the ATI graphics products. I do believe they probably paid too much for ATI, but that is not unusual. DOW is paying too much for ROH but they still think it is better for their long term."
      Their processors are inferior to their competitors, and recnetly so has become their graphics. Paid too much, probably, do ya' think? They have written down over 3.2 billion of the purchase, money down the toilet.

 
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