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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 5:37:58 PM , Rating: -1
It's called investing for a reason

Yes, that's right, but, IMO, that's very risky investing. May as well give your money away to a good cause like fighting disease or just burn it. I say this tongue-in-check (obviously), the point being that AMD is run by idiots. Mark my words. Buying ATI was very foolish. They should be focusing on their core business. Money should be spent on new high-tech fabs (like high-k 45nm to address the current leakage problems of 65nm and their coming 45nm processes) not foolish aquisitions. AMD's management act like fusion is going to change the industry. It's really laughable. They need a management shake-up over there to give them some renewed focus.

Sure, hindsight is 20/20. I admit that, but anyone thinking AMD is moving in the right direction is nuts. I don't hate AMD at all I just think they've really screwed themselves for the long haul. I'd rather see AMD in debt building high-k 45nm fabs instead of having this ATI ball and chain to deal with. They will be suffering a long time from this acquisition. It's time for AMD to go bankrupt to let the company reorganize and refocus.

OK, AMD fanboys, vote me down, go ahead, I'm ready!

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.. ;)

"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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