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Technology Stocks : Intel Corporation (INTC)
INTC 37.80-4.3%3:58 PM EST

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To: Mary Cluney who wrote (65974)10/7/1998 4:39:00 PM
From: Jeff Fox  Read Replies (3) of 186894
 
Mary, re:Stock values - equity

Sorry, your right. I rarely ever succumb to these temptations - just that this "straight line" was just too irresistible. Jim's post are valuable, considered and mostly fair minded, although his faith appears to be somewhat misplaced.

To Jim: Yes, today's attack on AMD share price was not warranted by today's news. AMD's prospects did not change today, at least not dramatically downward. The AMD situation is risky and complex. Jerry has been waging this phobic war for some time, and apparently for a little while longer. I think what changed today was the markets tolerance for risk.

As for my previous post, I intended to highlight that market share prices ultimately reflects the value of a company's assets as owned by its shareholders. Equity increases, ie earnings, provide funds for growth without increasing debt. Any company that increases debt adds leverage that adds uncertainty to the future equity. With AMD spending at such a high rate compared to its equity it is very, very questionable to whether AMD will ever be able to generate sufficient earnings to provide needed returns to support this rapidly increasing debt.

Jeff
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