AMD Bankruptcy or Bounce?

Sorry to hear that Michael... last nite I thought about it and instead of buying more stocks, I bought some puts.

Not like I made much from the puts, they were $12.95 marks, but at least I didn't go into the red. I still have my longs, so now I'm just buffering til I see what happens.

Maybe AMD is the stock to forget for a while as they get their shit together:P.
 
I remember like yesterday being on another thread with some of you.

I will have to look this up when I have a moment, but back in this past mid December 2006, the AMD CEO was at a presentation/meeting and made some very bullish comments. AMD stock surged & jumped to nearly $24 & was looking very strong from a technical standpoint.

Ironically, the day before this happened, a well known analyst that followed this sector put a huge downgrade to strong sell on AMD. He looked like a fool in this very moment, but he came out again the next day defending his research and analysis.

Now here we are three months later and the stock has tanked some 50%.
 
Its ok. My line of no-return was at 12.96. I can see the single digits in the near future now and then this thing can bounce into the pinks alongside Delta airlines.
 
On the arguments below, this is a market where a significant technical weakness can see severe degradation of market share ... its not cars or refrigerators. Also the EPS on yahoo of -0.34 isn't stellar.

The chart is very cool ... the definition of catching falling knives.

Best of luck.


Quote from hels02:

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.
More...
 
There is not any price advantage on any AMD processors; it has to cut another 20% or more to be competitiveness with Intel.
More downside for AMD
 
Quote from number22:

There is not any price advantage on any AMD processors; it has to cut another 20% or more to be competitiveness with Intel.
More downside for AMD
More...

I think there is on laptop processors, and a few desktop ones.

But you're right: Intel is intentionally squeezing AMD on pricing, in a very predatory way. They are taking away one of the pillars of AMDs competitiveness.

I have no doubt about this.

At the same time, Intel is trying to compensate for this by opening up a competitive advantage with AMD on laptop processors, to justify higher pricing. Intel will soon be using a 45 nm chip in its latest laptop processors.

Intel also laid off some 10,000 people, cutting massive costs from the company. Everything they've done in the last year has been a shot across the bow of AMD that they are prepared to go to a sustained war on pricing and new product pipeline.

It will be interesting to see how this plays out.
 
The entire PC market is fairly weaker since the window Vesta came out; and i just finished a report on semiconductor sector which shows significant weakness.

The irony is that Vesta is not a killer application everyone must need; even if it is true; Vesta still didn't waste enough PC resources to push everyone upgrading their hardware.So; where does the PC growth come from? We need multi-threads OS from ground up which Vesta is not, to take advantage all these dual-core processors.

Apple's iPhone, Blackberry maybe are the only hopes for this sector.
 
My two cents....

If any of you have seen Vista you'd know that the biggest upgrade needed for most PCs will be graphic cards. Vista runs fairly well other than that. Sure, a fair amount of memory and a decent processor are required.

I sometimes upgrade and build computers for people when I have the time. When they bought their computer, even recently, most comp stores don't scrimp on the memory or processor because those are the things people know about. Every Joe Schmoe off the street tells me that their computer has 2 gig of memory and a 3+ gig processor. The cheap box computers that you buy for $600 come with a great processor and at least a gig of RAM. That is plenty for Vista, but they also come with an on-board 126MB (or less) graphic card, because most people don't know the difference. Unless they are into 3D gaming they would never be able to tell.

Then vista enters the world. The average computer will be able to run Vista, but only after they upgrade to at least a 256MB (and preferrably higher) video card.

So to make a really long story just a bit shorter. The decision to buy ATI was probably a good move. AMD was getting squeezed by Intel. When I build computers for people and I ask if they want an AMD or an Intel platform, they always say that they heard AMD is better. Then I tell them the price difference and they always go with Intel. When it comes down to it folks, Intel offers more product utility for the price.

Combine with that the fact that there are many apps out there that won't run properly on an AMD system.

That said, I do find it odd that Apple is at highs right now while AMD is at lows.
 
Yea, both my Apple's have Intel Duo and Xeons.. Love em to death. Cannot stand windows, but need it for trading. It is truly amazing how AMD is still in business all these years. Have they ever been profitable?? IBM is also working on some chips to bring to the public. Intel is just a household name. Its like Yahoo! auctions playing catchup with eBay... Ain't going to happen..
 
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