AMD:News, Press Releases and Information Only! Message Board

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

AMD 203.76

-1.1%

Nov 21 9:30 AM EST

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To: StockMan who wrote (3796)	1/14/1998 2:26:00 PM
From: Robert Walter	Read Replies (2) of 6843

Stockman, aka Anthony, This is a very real possibility that some one will buy AMD. However for $4 a share is a joke. AMD's book value is $14.40 per share and any company will probably pay a premium over that price since the K6 demand is outstanding and suppassing supply. Also all the other products are making money except the K6. IMHO look for IBM to be the purchaser some time early this summer. If AMD does not execute the current plan flawlessly AMD may drop to around or just below book value/share. If that happens look for buyers to jump in. Compaq is a possible buyer but IBM seems like a better fit. Big Blue will more than likely lose all manufacturing rights to Cyrix's/National Semi's cpu's after the 686mx as National is going to want to lower costs and maintain fab capacity at its fabs. That will leave IBM producing only very low end cpu's in 1999. With that in mind Big Blue will want to jump on a company in time for it to convert its Vermont fab into that new product for 1999. As you already know IBM designed the process that AMD is using and certianly would have more expertise at obtaining higher yields than AMD. Couple that with IBM's packaging of the K6 for AMD, it's very deep pockets and it a very natural fit. IBM could than help finance the deal by spining of Vantis whose products do not fit into IBM's plan. IBM being very active in the networking arena would benifit from new designs and low cost products for integration into existing and future products. As for flash Big Blue might also sell that off to Fujitsu to help finance the deal. So be realistic AMD's stock price has really not a whole lot of downside potential left but if they do execute the plan the current price may seem cheap. Robert PS: If AMD does drops signficantly below book value I'll be buying. My current average share price is about $12 so I can be patient.(purchased all shares in July 1996.) Sold 1/2 at 38 last June so really my cost basis's is ZERO!

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