Formerly About Advanced Micro Devices Message Board

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Politics : Formerly About Advanced Micro Devices

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To: AK2004 who wrote (4902)	1/31/1997 12:31:00 AM
From: Aaron Cooperband	of 1577594

Albert - 1) I understand that without NexGen AMD would have been out of the Intel-compatible CPU business. But, if you pay too much for the future earnings potential of this business, its probably better to stay out of it. My question still stands. Can the NexGen acquisition earn more than $4.50 a share (or $5.80 a share using the $800M figure) for AMD? 2) I have heard the $800M figure for the cost of NexGen, but I've read $600M as well. I'm not sure which one is the most accurate. My question is even harder to answer using the $800M figure. Regarding dilution - please see my note number 4906. 3) There is no question that the purchase is already priced into the stock. Nevertheless, business is about investing $ to make a profit. When you buy a stock you are betting on the management's ability to accomplish this goal successfully. My quick-and-dirty analysis leads me to believe that AMD's management is paying too much for the earnings they are purchasing - i.e. they are not investing the shareholders' money wisely. Aaron

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