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Technology Stocks : AMD:News, Press Releases and Information Only!

AMD 214.00

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To: Maxwell who wrote (1979)	11/6/1997 12:24:00 AM
From: Paul Engel	Read Replies (2) of 6843

Maxwell - Re: " What do you think of this stategy?" IF (and I don't recommend this) Intel adopted this strategy, they could, as you noted, possibly drive AMD out of business - or at least drive them in to a vety big hole. (Make that a Bigger Hole). However, Intel's EPS would PLUMMET, not just decline a few per cent. Instead, they are turning the screws down slowly on AMD and Cyrix - essentially reducing them to a state of perpetually marginal profitability. In the mean time, Intel can make really good profits that will be re-invested in R & D and capacity expansion. This will keep AMD around to provide some semblance of a competitive market. But it will insure that AMD does not have the wherewithal to mount another serious threat to Intel with a competitive product. Remember - AMD had to buy their way out of a deep hole two years ago by purchasing NexGen. They may not be able to pull another rabbit out of a hat again - unless shareholders don't mind forking over another $600,000,000 in stock dilution to purchase another "brass ring". Paul

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