Advanced Micro Devices - Moderated (AMD) Message Board

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Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 203.14

-0.8%

Jan 9 9:30 AM EST

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To: Dan3 who wrote (228171)	3/16/2007 10:25:50 AM
From: justaview	Read Replies (2) of 275872

If the company sells additional shares at the current market price, it should have no effect on the price of the stock. If a grandma had a penis, she would be called a grandpa. If AMD could double the float and sell it at the current price, then what prevents them from doubling shares until they have the market cap bigger than Exxon’s? The answer is that they can’t sell them at the current price because doubling the shares, halves the earnings per share. For the P/E to stay constant, the share price has to be cut in half. This inverse relationship is only moderated by the increase in future earnings potential and the positive effect on the current earnings with the reductions in interest payments. As some have pointed out, the price will not be exactly half, but pretty darn close. AMD has to equip the next process node FAB just to stay in business. Intel is doing that with the cash flow, while AMD with doubling of the shares. Do you see the difference?

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