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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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By JonnyDough on 8/11/2007 7:10:44 AM , Rating: 1
AMD isn't focused on processors anymore? I'm sure that little things called 'division of labor' and 'specialization' allows them to be VERY focused on processors, as well as everything else like chipsets and graphics cards. Don't go thinking for a second that AMD has to remain focused on a single product line as it's core competency. Computer electronics is what they're marketing, and they're visionaries that are willing to go into massive debt in order to try and gain market share. Stocks and cash flow aren't everything. Sometimes obtaining the right tool (ATI) is the best way to get a jump on a competitor. AMD thought they saw that, and the poker game isn't over yet. They may be a lot smaller than Intel, but they're still an enormous company that is capable of multi-tasking. Your comment goes to show that you're a speculator and lack valid knowledge with which to back your opinions, just like so many others.

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