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AMD Bankruptcy or Bounce?
- Thread starter michaelscott
- Start date
I doubt Netscape can take any solace in an analogous situation.... (altho - admittedly the environment has changed somewhat ...)Quote from demoship:
There's one thing you're forgetting.
INTC cannot push AMD into bankrupt.
If they do, then INTC's going to have an anti-trust lawsuit on their asses because they're going to be the only major CPU maker left.
I tried to pick a bottom to AMD and got crushed, i dare not trade this company. Unless i see some real buyers i am staying away.
I've said before, I'm IN this stock for the long haul. I don't recommend anyone buy it. That said, I think I'll buy some more Monday, also with a stop (and I almost never do stops).
I am completely bewildered by the price action on this stock. It commands 25% of all the CPUs sold IN THE WORLD. ATI commands probably 40% of the graphics cards sold IN THE WORLD. CPUs are replaced on average every 3 years... Graphics cards every 2 years. WTF.
You'd think refrigerator and washing machine manufacturer stocks should be 1/2 the price of a CPU manufacturer, they have shelf lifes of 10 years, and you only need 1. Who doesn't have 2 - 5 PC's in their house? How many companies worldwide operate with NO computers?
NO other company I can think of has this much of a market share of anything... and be down around this price level and valuation. Intel and AMD have a monopoly on PC's worldwide... who can live without their PC's?
The only reason I can think of that makes sense, and it's not a very rational thought, is that someone is really manipulating this stock. How and why, I don't know, but this price action defies reason.
Here are their financials: http://www.marketwatch.com/tools/quotes/financials.asp?symb=AMD&sid=373&dist=TQP_Nav_financials
The biggest sucking sound is the -$416 (mil) from the "Income Acquired in Process R&D", a category I don't ever recall seeing before, which for past years was 0. This is ATI?
ATI cannot be losing money... not that much anyway. People are still buying ATI cards, every single day. ATI still offers one of, arguably THE, fastest and best graphics cards in existence on the market.
I guess the integration is taking longer than hoped, but to see this level of price drop, a year ago I would have said it was impossible. Heck, 3 months ago I would have said it was impossible.
And someone else pointed out, correctly, that without AMD, Intel would be a monopoly that even Microsoft could not be compared to (because Linux is always an alternative... what's the alternative to Intel processors if there were no AMD?).
Intel would have a worldwide monopoly the likes of which has never been seen since humanity climbed out of trees. AT&T was broken up because it dominated phone lines in the USA only.
Worldwide, who dominates CPU's? There is NO choice besides Intel and AMD. There are no Chinese generics, there are no South American generics. No AMD = Intel heading for breakup.
Graphics chips. Worldwide you can buy Nvidia or you can buy ATI. No ATI = what?
We need CPU's today a hella lot more than we need phone lines, even 30 years ago. Where can AMD go?
Bankruptcy is about the only thing to really worry about... and it is a worry. That would be unrecoverable. But otherwise, I don't see AMD dissapearing, it can't. Can it go down more? Probably. But these prices are already surreal.
I am completely bewildered by the price action on this stock. It commands 25% of all the CPUs sold IN THE WORLD. ATI commands probably 40% of the graphics cards sold IN THE WORLD. CPUs are replaced on average every 3 years... Graphics cards every 2 years. WTF.
You'd think refrigerator and washing machine manufacturer stocks should be 1/2 the price of a CPU manufacturer, they have shelf lifes of 10 years, and you only need 1. Who doesn't have 2 - 5 PC's in their house? How many companies worldwide operate with NO computers?
NO other company I can think of has this much of a market share of anything... and be down around this price level and valuation. Intel and AMD have a monopoly on PC's worldwide... who can live without their PC's?
The only reason I can think of that makes sense, and it's not a very rational thought, is that someone is really manipulating this stock. How and why, I don't know, but this price action defies reason.
Here are their financials: http://www.marketwatch.com/tools/quotes/financials.asp?symb=AMD&sid=373&dist=TQP_Nav_financials
The biggest sucking sound is the -$416 (mil) from the "Income Acquired in Process R&D", a category I don't ever recall seeing before, which for past years was 0. This is ATI?
ATI cannot be losing money... not that much anyway. People are still buying ATI cards, every single day. ATI still offers one of, arguably THE, fastest and best graphics cards in existence on the market.
I guess the integration is taking longer than hoped, but to see this level of price drop, a year ago I would have said it was impossible. Heck, 3 months ago I would have said it was impossible.
And someone else pointed out, correctly, that without AMD, Intel would be a monopoly that even Microsoft could not be compared to (because Linux is always an alternative... what's the alternative to Intel processors if there were no AMD?).
Intel would have a worldwide monopoly the likes of which has never been seen since humanity climbed out of trees. AT&T was broken up because it dominated phone lines in the USA only.
Worldwide, who dominates CPU's? There is NO choice besides Intel and AMD. There are no Chinese generics, there are no South American generics. No AMD = Intel heading for breakup.
Graphics chips. Worldwide you can buy Nvidia or you can buy ATI. No ATI = what?
We need CPU's today a hella lot more than we need phone lines, even 30 years ago. Where can AMD go?
Bankruptcy is about the only thing to really worry about... and it is a worry. That would be unrecoverable. But otherwise, I don't see AMD dissapearing, it can't. Can it go down more? Probably. But these prices are already surreal.
AMD is arguably incredibly overvalued, and will be for some time to come; maybe increasingly so, as its margins come under further pricing pressure from Intel.
Isn't that what drives share price action? EPS and EPS growth?
If so, AMD most likely has further to fall. Maybe a lot further.
The ATI deal was a very bad move for AMD. It only drained them of much needed cash that would have been helpful in both R&D, and in defending against Intel's aggressive pricing.
One last thing: Intel is owning the laptop market, which is where consumer PC global growth resides, and has even taken market share away from AMD in servers.
Isn't that what drives share price action? EPS and EPS growth?
If so, AMD most likely has further to fall. Maybe a lot further.
The ATI deal was a very bad move for AMD. It only drained them of much needed cash that would have been helpful in both R&D, and in defending against Intel's aggressive pricing.
One last thing: Intel is owning the laptop market, which is where consumer PC global growth resides, and has even taken market share away from AMD in servers.
From a profit standpoint maybe, and that's only a recent phenomenon.
BOOK value on the company is $10.42 right now. If the company were butchered for it's tangible assets, that's almost the price of the stock. How often do you see THAT?
This doesn't count that they DO still have that 25% market share of ALL CPU sold on planet Earth. They HAVE been investing a shitload in R&D and new facilities. They just bought the manpower, assets, and goodwill of the top graphics company in the world... 5 MONTHS ago. That's a lot to assimilate, and 5 MONTHS isn't a very long time.
More importantly... unless I'm not looking in the right places, I see almost NO insider selling. YES there is some selling, but not what you would expect. Why not?
Edited:
In 6 months, the total insiders buying was 141K shares. Total Insider selling was 202K shares.
In 3 months, total insiders buying 0 shares. Total insider selling 30K shares. Looks funny huh?
Now... everyone that works in AMD knows the price is TANKING. So why are they not selling? WHY?
I see more GOOG employees selling than AMD employees. What do they know we don't? Grant you AMD employees aren't buying either... but WHY AREN"T THEY SELLING?
BOOK value on the company is $10.42 right now. If the company were butchered for it's tangible assets, that's almost the price of the stock. How often do you see THAT?
This doesn't count that they DO still have that 25% market share of ALL CPU sold on planet Earth. They HAVE been investing a shitload in R&D and new facilities. They just bought the manpower, assets, and goodwill of the top graphics company in the world... 5 MONTHS ago. That's a lot to assimilate, and 5 MONTHS isn't a very long time.
More importantly... unless I'm not looking in the right places, I see almost NO insider selling. YES there is some selling, but not what you would expect. Why not?
Edited:
In 6 months, the total insiders buying was 141K shares. Total Insider selling was 202K shares.
In 3 months, total insiders buying 0 shares. Total insider selling 30K shares. Looks funny huh?
Now... everyone that works in AMD knows the price is TANKING. So why are they not selling? WHY?
I see more GOOG employees selling than AMD employees. What do they know we don't? Grant you AMD employees aren't buying either... but WHY AREN"T THEY SELLING?
It looks like AMD has failed me. I had so much faith.
Now I will wait until AMD falls into bankruptcy court. I really dont know anything about the financials or fundamentals. I do have a computer with an AMD processor. However, I do know that this chart has a lot more room to fall. Maybe my post might be a contrary indicator, but I just have this feeling that the head&shoulders on the chart will make this company fall into the pinks in due time.
Now I will wait until AMD falls into bankruptcy court. I really dont know anything about the financials or fundamentals. I do have a computer with an AMD processor. However, I do know that this chart has a lot more room to fall. Maybe my post might be a contrary indicator, but I just have this feeling that the head&shoulders on the chart will make this company fall into the pinks in due time.