No. The stock price is going to 0. Chance of bankruptcy still exists.
23-12.6= 10.4
10.4/3= 3.47
3.47+12.6= 16.07
Actual turning point appears to be 15.95.
The next leg down begins now if it cant bust through 16.07.
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We have a substantial amount of indebtedness that could adversely affect our financial position (meaning bankruptcy).
As of March 31, 2007 we had consolidated debt of approximately $3.8 billion. In April 2007 we issued $2.2 billion aggregate principal amount of our 6.00% Notes and used $500 million of the net proceeds to repay a portion of the October 2006 Term Loan. In addition, a significant portion of our consolidated debt bears a variable interest rate, which increases our exposure to interest rate fluctuations. Our substantial indebtedness may:
⢠make it difficult for us to satisfy our financial obligations, including making scheduled principal and interest payments;
⢠limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions and general corporate and other purposes;
⢠limit our ability to use our cash flow or obtain additional financing for future working capital, capital expenditures, acquisitions or other general corporate purposes;
⢠require us to use a substantial portion of our cash flow from operations to make debt service payments;
⢠limit our flexibility to plan for, or react to, changes in our business and industry;
⢠place us at a competitive disadvantage compared to our less leveraged competitors; and
⢠increase our vulnerability to the impact of adverse economic and industry conditions.
If we cannot generate sufficient operating cash flow or obtain external financing, we may be unable to make all of our planned capital expenditures (meaning bankruptcy).
For 2007, we plan to make approximately $2.0 billion of capital expenditures, including related to expanding production capacity at Fab 36 and commencing the conversion of Fab 30 to a 300-millimeter facility. However, our ability to fund these capital expenditures in accordance with our business plan depends on generating sufficient cash flow from operations and the availability of external financing, if necessary.
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Our capital expenditures, together with ongoing operating expenses, will be a substantial drain on our cash flow and may decrease our cash balances. The timing and amount of our capital requirements cannot be precisely determined at this time and will depend on a number of factors including future demand for products, product mix, changes in semiconductor industry conditions and market competition. We regularly assess markets for external financing opportunities, including debt and equity financing. Additional debt or equity financing may not be available when needed or, if available, may not be available on satisfactory terms. In addition, in order to finance our acquisition of ATI, we entered into a Credit Agreement with Morgan Stanley Senior Funding Inc. dated October 24, 2006 (October 2006 Term Loan). While amounts remain outstanding under this agreement, we are required to prepay these amounts with (i) 100 percent of the net cash proceeds from certain debt incurred by us or a restricted subsidiary other than excluded debt as defined in the October 2006 Term Loan, (ii) 50 percent of net cash proceeds from the issuance of any capital stock by us (subject to specified exceptions); (iii) 100 percent of extraordinary receipts (as defined in the October 2006 Term Loan) in excess of $30 million; (iv) 100 percent of net cash proceeds from asset sales outside of the ordinary course of business and in excess of $30 million, subject to our ability to reinvest these proceeds; (v) commencing with the fiscal year ending December 30, 2007, 50 percent of excess cash flow; and (vi) 100 percent of net cash proceeds from sales of capital stock of Spansion Inc. See âPart I, Item 2, MD&AâLiquidity,â for additional information on the definition of âexcess cash flow.â These mandatory prepayment requirements limit our ability to use our cash flow, borrow additional funds or conduct equity offerings for future working capital, capital expenditures, acquisitions or other general corporate purposes. Our inability to obtain needed financing or to generate sufficient cash from operations may require us to abandon projects or curtail capital expenditures. If we curtail capital expenditures or abandon projects, we could be materially adversely affected.