Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: Brian Hutcheson who wrote (4901)	1/31/1997 12:06:00 AM
From: Aaron Cooperband	of 1577030

Brian - Goldman is the company expecting $2.00 a share earnings for '97. At a P/E of 25 that gets you $50/share, so I'm not surprised that they recommend buying the stock. My question is different. Did AMD pay too much for their earnings or not? To say that AMD didn't pay anything to buy NexGen is ridiculous. They diluted your and every other AMD shareholder's ownership in the company. If we assume that NexGen earns nothing for AMD, your and every other shareholder's EPS are reduced by (137-105)/137 or about 25%. NexGen must help AMD make this earnings deficit back, otherwise you are worse off. Can NexGen really increase AMD's earnings FOREVER by MORE THAN 1/3 of what they would have earned without NexGen? Aaron

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