Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 215.14

+0.8%

9:51 AM EST

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To: chomolungma who wrote (82936)	6/19/2002 2:37:02 PM
From: niceguy767	Read Replies (1) of 275872

chomolungma: "So you have the three biggest players with an average price/sales ratio of .13. If your new AMD with half of a $30 billion market has a P/S ratio of .13, it would have a market cap just under $2 billion. That's a third lower than it is right now." and INTC's would be $2 billion, not $130 billion...Just who is playing with fire...I think you've got it backwards... "That's your dream scenario?" You're sounding like wannab...My short term plan has AMD with 30% share and market cap of $43 billion, while INTC, owing to inferior product lineup backs off to $90 billion market cap, with total market cap remaining constant at $133 billion... "Like I said, it's a nightmare of a business plan." Certainly a $130 billion decline in market cap, as yopu suggest, in such a scenario, would be a nightmare... "Just for comparison, look at Southwest's P/S ratio. It is a healthy 2.2. The difference? Southwest is constantly profitable. If AMD would give up the quest to "be like Intel" and just strive to make a nice profit margin, I have no doubt they would be rewarded by the market." And why are they profitable??? Because they offer the best "price/operformance" product in the markets in which they operate...INTC, by the end of this year, will offer the second best products in the markets in which they operate and require a significantly higher ASP to compete...That's not a viable business plan from my vantage point!!!

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