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AMD to issue $2.2 billion USD in Convertible Senior Notes

AMD is a company that has been strapped for cash lately. In late April, the Sunnyvale, CA based company announced that it would offer Convertible Senior Notes to raise around $2.2 billion USD. AMD set a conversion point of $42.12 USD per share at a time when its stock price was $14 USD.

The company's efforts to raise more cash have intensified even further. Yesterday, AMD priced an additional $1.5 billion USD in Convertible Senior Notes at a conversion point of $20.13 USD per share. The conversion price represents a 50 percent premium over AMD's $13.42 USD stock price at close of day on August 8.

AMD plans to use the funds received from the offering to pay an outstanding balance on a loan from Morgan Stanley Senior Funding in late 2006. The company borrowed around $2.5 billion USD in loans and $1.2 billion USD in common stock to fund the $5.4 billion purchase of ATI Technologies. The company also reported a net loss of $600 million USD last quarter while archrival Intel reported net income of $1.3 billion USD.

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RE: Sold, or will sell?
By 16nm on 8/10/2007 11:53:29 AM , Rating: -1
AMD want the public to fund their idiotic purchase of ATI. Whoever would buy these bonds would have to be nuts IMO. May as well just give the money to charity. At least it wouldn't be throwing it away. Nope, I think AMD should pay off the loan with their earnings. What, no earnings??? Then they need to get on the ball and start creating some! Imagine the earnings from ATI paying for the acquisition. That would show that AMD is not run by idiots.

Am I being too harsh?

After that recent and lovely earnings report from Nvidia, I stopped waiting for ATI to sort out all the problems with their HD2000 cards and bought a Nvidia one which did cost me a little more than I wanted to spend but at least I know it will work. I sure did want that audio through HDMI function that ATI promised, but I'm not going to miss the football season over it.

RE: Sold, or will sell?
By bobdelt on 8/10/2007 12:54:06 PM , Rating: 2
It's called investing for a reason. Almost every company finances their businesses with debt, and the ones that don't probably should or have way too much cash on hand and should issue a special dividend (like what palm is doing).

RE: Sold, or will sell?
By 16nm on 8/10/07, Rating: -1
RE: Sold, or will sell?
By BikeDude on 8/10/2007 9:05:08 PM , Rating: 1
I think AMD made the right move. I hate motherboards with integrated graphics, but... For business use, they make a lot of sense. A high percentage of PCs sold do not need the latest GPU.

And there might be some performance benefits from integrating the GPU.

Laptops might be able to squeeze out more performance while reducing power consumption.

etc... etc...

For most gamers, the concept of an integrated GPU is (for now) a dead end.

Besides, Intel have been talking about similar designs for quite a while. AMD need something to match or surpass them.

RE: Sold, or will sell?
By wordsworm on 8/11/2007 11:53:04 AM , Rating: 2
I read somewhere that Nvidia is working on getting integrated graphics to work with their cards as physics processors. If that works out, and AMD comes up with something similar, the onboard graphics could become an important part of the package.

RE: Sold, or will sell?
By 16nm on 8/12/2007 3:17:08 PM , Rating: 2
Why? How does ATI help AMD create CPU/GPU processors? AMD should have hired a few top engineers from ATI for their Fusion, not undertaken a multibillion $ acquisition that is mostly unrelated.

Oh, don't get me wrong, I don't think Fusion is a bad idea at all. I just think that it is not as important as AMD think it is. ATI cost TOOOO much and they don't even have anything related to this concept already in the works. I don't think ATI brought anything to the table with regard to this. AMD should have done it on their own like Intel are doing, OR bought a company that is already moving in this direction (fusing CPU and GPU) if one even exists! Now, the ATI guys are in the toilet when they were a reasonably healthy company at the time of acquisition. Look at the market share Nvidia keep gaining. When will this come to an end? ANd AMD are just as f'ed up for wasting so much d@mn money. The CEO and CFO should be in some very deep poo-poo if you ask me. Their heads should be rolling. In my opinion, they were only concerned with becoming a large chip manufacturer to massage their egos all else be damned.

I have a feeling Intel are going to absolutely dominate the whole idea of the CPU/GPU processor. AMD are royally screwed. Intel tripped up and gave AMD an excellent opportunity. AMD took very little to no advantage of it, and a couple years later, everything is a mess. Proof: Now that's desperation.

RE: Sold, or will sell?
By vignyan on 8/11/2007 6:49:47 AM , Rating: 3
Dude... me being an Intel supporter think that AMD has gone in the right direction... Probably i am nuts ;) but if you think in a bigger scale, the concept of SOC has been in the market for quite some time now. Now since intel had planned for that, AMD needs to gear up for that... Imagine that in 2009, intel comes out with a CPU+G+IMC on same package and ICH off chip (in sense of platformization), and AMD still produces (probably better) but only chipset, then its gonna be a BIG trouble for them in terms of competition. The Intel based systems in that scenario will be superior in almost all aspects as compared to any main-stream solution AMD and partners announce...

I think its good for AMD that they took ATI.. but for 5.4bn, ya... they seem to have paid a bit more than 1-1.5bn extra for the aquisition. Plus ATI has a record of not sticing to the dead lines consistantly ;)... Which is a perfect match for AMD... keeping up the reputation.. ;)

RE: Sold, or will sell?
By ebakke on 8/10/2007 1:26:25 PM , Rating: 2
I hope you hold some entry-level job, and never get into to any kind of management. That is, unless you go to school and learn how a business actually works.

"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il
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