|Bid||48.40 x 800|
|Ask||48.48 x 1300|
|Day's Range||48.58 - 50.28|
|52 Week Range||27.20 - 57.57|
|Beta (5Y Monthly)||1.43|
|PE Ratio (TTM)||8.21|
|Forward Dividend & Yield||1.40 (2.78%)|
|Ex-Dividend Date||Oct 29, 2020|
|1y Target Est||N/A|
(Bloomberg) -- Advanced Micro Devices Inc. agreed to buy Xilinx Inc. for $35 billion in stock, quickening the pace of chip industry dealmaking and using its largest acquisition ever to add products to challenge leader Intel Corp.Xilinx investors will get 1.7234 AMD shares for each Xilinx stock they own. That values Xilinx at about $143 a share, 25% more than the closing price on Monday and 35% above the price before news of a possible deal was reported earlier in October.The deal is a coup for AMD Chief Executive Officer Lisa Su, creating a company with a larger research-and-development budget and a broader array of products to take on Intel Corp. It also tips the industry into a record year for acquisitions. AMD shares slid 3.5% in New York, leaving them up about 74% this year. Xilinx rose 10% for a gain of 29% so far in 2020.Since taking over in 2014 when AMD was in crisis, Su has slashed debt and overseen the development of more powerful processors. Revenue and profit have surged and the stock has soared. Now Su is using that currency to snap up a company with complementary products that generate steady cash flow.The CEO said she won’t be distracted by the acquisition and will continue to deliver products that meet performance expectations, on time. The combined company will aim for 20% annual revenue growth, the same target as AMD, Su said.“We’ve built a very strong execution capability. That’s core to my DNA and core to today’s AMD,” Su said in a phone interview. “This is about what’s the next step for AMD.”Some investors and analysts were concerned that AMD might borrow heavily to pay for a Xilinx acquisition, repeating costly mistakes from more than a decade ago. The all-stock deal unveiled on Tuesday should calm those fears.Read more: AMD Tries to Avoid Past Debt-Ridden Deal MistakesAMD also reported third-quarter results that beat Wall Street estimates and gave a strong revenue forecast for the current period, buoying confidence in Su’s ability to absorb Xilinx and keep powering growth. Sales in the fourth quarter will be about $3 billion, a jump of 41% from a year earlier. On average analysts had projected $2.62 billion. That follows an increase of 56% in the third quarter on demand for PC, gaming and data center processors.In contrast with Intel last week, Su said demand for data center chips remains strong and believes AMD gained market share. “We are on track to deliver significant annual revenue growth this year and have never been more confident in our trajectory,” she added.The acquisition still needs to be approved by shareholders and regulators, including authorities in China. AMD is targeting the end of 2021 for the deal to close. When it does, the transaction will immediately improve AMD’s profitability, cash flow and revenue growth, AMD said in a statement.AMD shareholders will own 74% of the new company. AMD will pay Xilinx $1.5 billion if the deal fails to close in certain circumstances. For Xilinx, that fee is $1 billion, according to a regulatory filing. AMD would also have to pay a lower $1 billion fee if it can’t get regulatory approvals in time.Su will be CEO of the new company and Xilinx’s Victor Peng will be president, overseeing the Xilinx business and strategic growth initiatives.“We had a great path as a standalone company,” Peng said in an interview. “This is about choosing to be part of an even greater company which is AMD.”Read more about the AMD CEO hereThe deal will give Su more of the pieces she needs to break Intel’s stranglehold on the profitable market for data center computer components. Xilinx, based in San Jose, California, makes field programmable gate arrays, or FPGAs. That kind of chip is unique because its function can be altered by software, even after it’s been installed in a piece of machinery.FPGAs are used in wireless networks, so the purchase will give AMD new telecommunications customers just as that industry spends billions of dollars to build fifth-generation, or 5G, services. Xilinx is also rapidly expanding in data centers, where its chips accelerate computing and help connect servers. The other major FPGA supplier is Intel, which gained its market position through the purchase of Altera Corp. in 2015.Xilinx last week reported quarterly data center sales were up 30% and now account for 14% of total revenue. While it generates less revenue than AMD, Xilinx is more profitable.The transaction is partly driven by the growth of big cloud-computing providers such as Amazon.com Inc. and Alphabet Inc.’s Google. Those companies are spending heavily on new data centers to meet a surge in demand for computing power delivered via the internet. They’ve become major purchasers of server chips, which run thousands of computers that are packed into these data centers.The cloud providers are also racing to enhance services, such as search, with artificial intelligence software, and many companies are experimenting with building their own hardware to do so. That’s putting greater pressure on chipmakers to improve their offerings.At the same time, devices in some of Xilinx’s traditional markets, such as automotive and networking, are increasingly taking on more of the attributes of computers. AMD currently doesn’t have access to those customers, while Intel does.Credit Suisse and DBO Partners advised AMD. Morgan Stanley advised Xilinx.(Updates with CEO comments in sixth paragraph. An earlier version of this story was updated to correct the time required for regulatory approval of the deal.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Jack Ma’s Ant Group Co. is planning to stop taking investor orders for the Hong Kong leg of its initial public offering a day earlier than scheduled as the record stock sale has already been heavily subscribed, according to people familiar with the matter.Demand has been so great the Hangzhou-based firm is set to close the institutional investor order book on Wednesday, said the people, requesting not to be identified because the matter is private. The company was initially planning to close the Hong Kong book at 5 p.m. Thursday for each region globally, according to terms of the deal obtained by Bloomberg News. The potential move would bring the closing in line with the Shanghai leg.A representative for Ant declined to comment.Ant is seeking to raise about $34.5 billion through IPOs in Shanghai and Hong Kong, a blockbuster listing that will be the biggest IPO ever and make it one of the most valuable finance firms on the planet. The operator of the Alipay platform will have a market value of about $315 billion based on filings Monday, bigger than JPMorgan Chase & Co. and more than the gross domestic product of Finland. The sale vaults Ma’s fortune to $71.6 billion, topping the Walmart Inc. heirs.This is “a homecoming for capital markets in Shanghai and Hong Kong,” said John Ho, founder of Janchor Partners. Ho, who invested $400 million in Ant two years ago, said he’s trying to get more Hong Kong shares, adding that being able to invest in Ant “is priceless.”The IPO is attracting interest from some of the world’s biggest money managers, and sparking a frenzy among individual investors in China clamoring for a piece of the sale. In the preliminary price consultation of its Shanghai IPO, institutional investors subscribed for over 76 billion shares, more than 284 times the initial offline offering tranche, according to Ant’s Shanghai offering announcement.T. Rowe Price Group Inc., UBS Asset Management and FMR LLC, the parent of Fidelity Investments, are among the money managers angling for a piece of the deal, a person familiar with the matter has said. Hong Kong stockbrokers are so confident the IPO will go smoothly that they’re offering to let mom-and-pop investors buy the stock with as much as 20 times leverage.The strong demand puts the much-anticipated IPO on track to surpass Saudi Aramco’s $29 billion sale last year. Ant priced its Shanghai stock at 68.8 yuan ($10.27) apiece and its Hong Kong shares at HK$80 ($10.32) each. The company may raise another $5.17 billion if it exercises the option to sell additional shares to meet demand, known as the greenshoe.Ant will trade under the ticker symbol 688688 in Shanghai and 6688 in Hong Kong, in keeping with Ma’s fondness for the number eight, which is often associated with wealth in China. Ma’s Alibaba Group Holding Ltd., which owns about a third of Ant, trades under the ticker 9988 in Hong Kong.The fintech giant is charging ahead with its landmark offering just days ahead of the U.S. election. The Hong Kong trading debut will be on Nov. 5., only two days after the U.S. vote, an event that could spark market volatility if the vote is disputed or counting delayed.Ma, the former English teacher who co-founded Alibaba with $60,000, is poised to become the world’s 11th-richest person after the Ant IPO.Ma’s 8.8% stake is worth $27.4 billion based on the stock pricing in Hong Kong and Shanghai. That will lift the 56-year-old’s fortune to $71.6 billion on the Bloomberg Billionaires Index, exceeding that of Oracle Corp.’s Larry Ellison, L’Oreal SA heiress Francoise Bettencourt Meyers and individual members of the Waltons, whose family own Walmart.The IPO promises a lucrative pay-day for some of the world’s biggest investment banks. Ant picked China International Capital Corp. and CSC Financial Co. to lead its Shanghai leg of the IPO. CICC, Citigroup Inc., JPMorgan. and Morgan Stanley are heading the Hong Kong offering. Existing Ant shareholders won’t be able to sell shares for six months, according to the filings.(Updates with details on the pricing from sixth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- SAP SE shares dropped as much as 21%, the biggest intraday fall since 1999, after the software company cut its revenue forecast for the full year and said it expects a fresh wave of lockdowns to hurt demand through the first half of 2021.In a test for Christian Klein, who became sole chief executive officer in April, the pandemic will delay SAP’s goals for cloud revenue, overall sales and operating profit by one or two years, especially in hard-hit industries such as business travel, the Walldorf, Germany-based company said in a statement on Sunday. The drop in shares on Monday wiped 28 billion euros ($33.1 billion) off SAP’s market value.The drop-off in SAP’s cloud revenue is a sign that companies are putting off making major decisions about updating their software, as the pandemic continues to limit any global economic recovery.SAP said it expects limited growth and margin improvement over the next two years, and moved expectations to meet its 2023 strategy plan out to 2025. Klein said on a call Monday he expects a conservative recovery into the first half of next year.The previous outlook “assumed economies would reopen and population lockdowns would ease, leading to a gradually improving demand environment in the third and fourth quarters,” SAP said in the statement. “Lockdowns have been recently re-introduced in some regions and demand recovery has been more muted than expected.”The pessimistic short-term outlook from SAP risked a knock-on effect on the European software industry, warned analysts at Citi. Europe’s Stoxx Technology index fell as much as 6.3%, its biggest one-day loss since March.SAP now expects adjusted revenue of 27.2 billion euros to 27.8 billion euros ($32.2 billion to $32.9 billion) at constant currencies in 2020, lower than the earlier guidance of 27.8 billion euros to 28.5 billion euros. SAP also said it no longer sees a boost from business-travel related revenue this year in its Concur business.It’s difficult to find positive news in the results, Nicholas David, an analyst at Oddo BHF said Monday. “The warning on the mid-term ambitions was expected/feared by the market but the new ambitions are lower than the most pessimistic expectations,” he said in a note.Qualtrics IPOSAP said it is in the advanced stages of a listing for its Qualtrics software unit. It announced the decision in July to list the U.S. unit less than two years after buying the company for a record sum, a surprise u-turn signaling a strategic shift under Klein.“We are well advanced in the preparations of the Qualtrics IPO”, Chief Financial Officer Luka Mucic said on a call Monday. “Qualtrics has had a strong quarter which will set it up for further growth into next year.”New OutlookAdjusted cloud revenue is expected to be 8 billion euros to 8.2 billion euros in 2020, down from a previous estimate of 8.3 billion euros to 8.7 billion euros.Operating profit will be 8.1 billion euros to 8.5 billion euros this year, down from expectations of as much as 8.7 billion euros.SAP updated its mid-term ambition for total revenue to more than 36 billion euros in 2025 compared to its previous estimate of 35 billion euros in 2023.The company sees more than 22 billion euros in cloud revenue and over 11.5 billion euros in operating profit by 2025.Third QuarterThird quarter non-IFRS operating profit decreased by 12% year over year to 2.07 billion euros. That compared to the 2.15 billion-euro average estimate from analysts in a Bloomberg survey.Revenue in the period declined 4% to 6.54 billion euros compared to analysts’ average 6.89 billion euro estimate.Get MoreRead the full statement here.After Losing Co-Pilot, SAP CEO Plots Solo Path Through PandemicU.K.’s CMA to Start Antitrust Probe on Sinch, SAP Unit DealSAP Is Said to Tap Morgan Stanley, JPMorgan for Qualtrics IPO(Updates with context from paragraph three.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.