You take a position that AMD had the choice to go either acquisition or merger route at the same cost to AMD shareholders. It is also possible that ATYT wanted to pick up the cash and leave scene asap. Or, the cost of equity financing would have worked out comparatively higher.
Acquisition has its own charm, particularly in its speed of execution, and less bickering over 3rd-party contract renegotiations, relative asset valuations, etc.
Given what has actually happened, and assuming that these guys know a thing or two about M&A, what can we surmise? Lets put on our Bayes' hats and try to make some educated guesses - and I will start with these 2 (although not very educated ones.)
(1) AMD may not have wanted to dilute at < $21. Do they know something that others may not? It appears that this price has since then become a floor, meaning while people may not buy AMD's story, they also may not want to bet against it.
(2) AMD may have wanted to speed up the integration? Are they working on something jointly that truly requires such high level of integration? My speculation is that, for the moment, the innovation is shifting gears and moving to applications domain for the moment - video & graphics, communications, gaming, etc. That the X86 may be heading to become a staple and that the profits and the multiples will come from applications.
regards
-d |
