My apologies if this has already been posted....
cbs.marketwatch.com
AMD calls rise on takeover thoughts
By Brenon Daly, CBS MarketWatch
Last Update: 05:32 PM July 09, 1998<Picture>StockWatch
NEW YORK (CBS.MW) -- Calls on Advanced Micro Devices were active Thursday as traders speculated that a PC maker might buy the slumping chipmaker.
"There's a rumor of a takeover," said Jeff Girtler, a trader for Group 1 at the Pacific Exchange. "When the stock gets hit like this, people think, 'Hey, it's getting a bit cheaper."
Advanced Micro Devices (AMD) shares fell to its lowest level in almost two years on Thursday after the company posted a wider-than-expected second-quarter loss. Shares closed off 2 3/8 at 15 3/4. See full story.
More than 2,200 July 20 calls (AMD=GD) and 1,600 contracts of the August 20 calls (AMD=HD) traded on Thursday. Interestingly, the 1,600 trades of the August paper comes on an open interest of just 2,000 contracts, meaning that fourth-fifths of outstanding contracts changed hands.
Makers of personal computers, such as Gateway 2000 or Compaq, have been named as potential suitors, Girtler said. In owning a chip plant, the PC makers wouldn't have to rely on chips from Intel, which is currently facing a federal investigation because of alleged heavy-handed competitive tactics.
There is also speculation that chief executive W.J. Sanders will be tossed out of the top post. Over the past year, shares have shed nearly two-thirds of their value.
"Sanders is a visionary, but he's not really focused on the business anymore," Girtler said. |
