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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 255.96+2.3%Nov 5 3:59 PM EST
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To: Sarmad Y. Hermiz who wrote (247624)2/12/2008 11:49:00 AM
From: pgerassiRead Replies (2) of 275872
 
Sarmad:

You just want to stick your head in the snow.

Looking at worst case scenarios, the picture is quite grim. At 10% of revenue for the 7 year period comes to about $20 billion. That would effectively bankrupt the company. Now they could sell a bunch of their stock to cover it, but it would be at firesale prices.

Now even if they fine is 5-10% of that ($1-2 billion), it would cause an immediate crash in the stock. Not only the fine itself, but what it judged illegal, And then there is what this will means for other regulators. Asia, mostly Japan, Korea, Taiwan and China, would likely follow and so would India. It would look bad for the FTC not to follow. And then there is the biggie, AMD's lawsuit. Damages would be much higher and would be tripled as multiple acts could easily be shown, invoking RICO.

As to the effects not being seen in the stock price, it is simply lag time in the stories. Most small investors won't know until they get home and it takes a few days to adjust the risk viewpoints. However when the fine is handed down, the effects would likely be quite immediate as there would no fuzziness. But you know that.

All this does is to make the likelyhood of a fine much greater than before and the amount is also most likely to increase.

The trouble with sticking your head in the snow is that you don't see the snowplow that's going to run you over. Around here they may not see you until after with the snow piled so high.

Pete
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