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AMD receives some much needed cash from the Middle East

Things haven't been going AMD's way ever since the acquisition of ATI Technologies in 2006. The company has been assaulted by Intel's Core-based processors in the desktop, server and notebook markets and its graphics offerings still are outgunned by NVIDIA -- even with the newly introduced Radeon HD 3870 and HD 3850.

As a result, the Sunnyvale, California-based company has been taking a beating as most recently observed in its Q3 2007 earnings report. AMD recorded a $226 million USD operating loss and $396 million USD net loss on revenue of $1.632 billion USD. $78 million USD of the loss was attributed to AMD's ATI acquisition.

However, things may finally be looking up for the company. Mubadala Development Company, a United Arab Emirates (UAE) government-funded investment firm based in Abu Dhabi, has acquired an 8.1 percent stake in AMD for $622 million USD. The company received 49 million shares at a price of $12.70. Despite the buy-in, Mubadala will not receive any board representation as a result of the deal.

AMD will receive a total of $608 million USD after repaying Mubadala $14.6 million USD in expenses. AMD plans to use the cash to invest in "research, product innovations and manufacturing excellence." The Business Review reports that some of the funds will be channeled into a $3.2 billion USD chip plant on the Luther Forest Technology Campus in Malta, NY.

"We proudly welcome Mubadala, a world-class investor, to the AMD shareholder family," said AMD Chairman and CEO Hector Ruiz. "This investment strengthens AMD’s ability to deliver customer-centric innovation and choice to the marketplace, creating greater value for all of our shareholders."

For its part, Mubadala's CEO and Managing Director, Khaldoon Khalifa Al Mubarak, added "AMD is a great fit for Mubadala's investment approach -- a spirited competitor and innovator led by a strong and visionary management team. We see significant opportunities for long-term growth and value creation."

Mubadala has been spreading money around quite frequently in recent months. According to Bloomberg, the investment firm captured a 7.5 percent stake ($1.35 billion USD) in the Caryle Group. Some of Mubadala's other investments include Ferrari SpA and SR Technics.

The investment from Mubadala couldn’t have come at a better time for AMD. AMD has faced an incredible amount of debt and not only record losses in Q3 as previously mentioned, but also during Q1 and Q2. The company has also seen the departure of two former ATI executives -- CEO and President David Orton and vice president of worldwide sales Rick Hegberg, as well as executive vice president and chief sales and marketing officer Henri Richard.

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Letter from Hector to the Arabs
By artbronze on 11/16/2007 8:08:25 PM , Rating: 3
Dear Mr Arab invester,
My name is Hector Ruiz, I am in charge of a big company and do I have a deal for you. Lately there is this big dude up the street that has been beating me up, picking me up by my feet and all of my money falls out onto the ground. The guy who is way bigger than me keeps on doing this no matter what I do. Last night I knew he was going to be at the end of the block when I got there so I brought a big stick I
knicknamed Barcelona with me. That big bad guy grabbed the stick right out of my hand and broke it over his knee. I was mortified and froze in horror when this happened and he grabbed me again and shook the change right out of my pockets. Hector, I thought to myself you have got to do better than that so I went to the bank and took out every cent I had left and bought a big aluminum bat called the ati. It was a mean looking thing with spikes sticking out of it. I didnt spend all the money though and had enough left over to buy myself some ice cream. On the way to the ice cream parlor that big guy was waiting for me again, I yelled at the guy to stay back, I had a secret weapon to destroy him if he got too close. I showed him my radeon bat and he just laughed, dropped his drawers and blew a fart in my dirction. It was a stinky one too and the ati radeon bat melted right out of my hands. I was really disapointed when the big ugly guy again picked me up by the feet and took out all my ice cream money. Well heres the deal Mr Arab investor, If you will give me 600 million bucks heres what I will do with it. First I will give myself a big raise so I can buy my wife something nice so she will stop whooping my butt after the big guy down the street takes my money. Then I will buy all the guys at the fab some ice cream because its damn hot in there and they have had a bad attitude these days when they think they will be working for the Taiwonese soon. Then I will take the rest of the money go down to the street and try to sneak past that big guy and put it in the bank.

By crystal clear on 11/17/2007 5:28:52 AM , Rating: 1
Wow thats funny !

By crystal clear on 11/17/2007 10:59:07 AM , Rating: 1
Word of the day

My name is Hector Ruiz............

Did you know whats Hector as per the dictionary below-

hector \HEK-tur\, noun:
1. A bully.

transitive verb:
1. To intimidate or harass in a blustering way; to bully.

intransitive verb:
1. To play the bully; to bluster.

hec·tored, hec·tor·ing, hec·tors .......

You make him look the hectored

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