If Amd nets $150MM (but pick up still another big time annual rental bill), what will that do for Amd's books? It's just enough to nullify a small part of the GF note they must pay this qtr. It's just enough to nullify their qtrly losses. They'll be right back in the soup in Q1. And then intel's Haswell series will start rolling out in volume and across all laptops and desktops, leaving Amd in still ANOTHER downward swirl. How much is the new tent on a $200MM lease? Isn't that about $3MM per month ($35-$40 loss per year)?? This is a "good deal"??? I'll tell ya what it is. It's a last ditch desperate deal.
Nah. not so. Amd can still lay off another 5000 and hang in there for 3 more years. If they fire everyone but Worry Weed, they can hang in there for 5 more years. Companies die very slowly - unless JPM milks Amd fast. BTW, JMP is another big cash loss added to the new rental cash burn.
Ace, finally you are learning that stock prices can rise, even though the company has very poor fundamentals, for many different reasons.
As I have told you many times:the stock market is not always rational.
I bought bundles of SIRI stock at $0.15, it is now trading at $2.77. I bought HOV (a company that almost went bankrupt) at an average price of $2.96 it is now trading at $5.30.
Of course I have lost money buying many speculations. My overall performance has been very successful.
I don't think so. It's just swapping a mortgage payment for a lease payment, so the impact on cashflow won't really change. On the other hand, it will put $150 million in AMD's bank account. This is important.
1. By December 31, 2012, AMD must pay GF another $175 million.
2. By AMD's own admission it requires a minimum of $1.3 billion in cash reserves to sustain current operations.
3. At the end of last quarter, AMD's cash position hovered right at that $1.3 billion level.
4. Industry analysts have noted that AMD is burning cash at an alarming rate.
The cash infusion from sale of the property should keep AMD's cash close to the minimum necessary level for AMD to stay in business an extra quarter. It is a smart if forced move; AMD really had no other choice. There's nothing else it could sell quickly enough to generate that much cash.
Unfortunately for the fantards, it's a one-time thing. AMD has already sold off and leased back its other real estate. So AMD survives for an extra few months as a result of the sale. Big whoop.
Sentiment: Strong Sell