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Politics : Formerly About Advanced Micro Devices
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To: A. A. LaFountain III who wrote (60539)6/5/1999 2:42:00 AM
From: Amy J  Read Replies (3) of 1572088
 
RE: "the willingness of INTC management to pay substantial premia over market value"

Tad,

2X revenue isn't substantial premia.

Suppose T-bills were earning 7.5% and a company was earning 15% of revenue on sales. Then an investment in the company at exactly 2X sales would earn you exactly the same as T-bills. Company earnings could grow 30% in the next year, whereas the T-bill would be the same year after year.

Of course, it always gets down to what the buyer will pay. WebTV had essentially zero sales, and sold for $450M. Dialogic had about $290M in sales and sold for $780M. But if you subtract out DLGC's cash, the figure is more like $680M. Plus, the opp is $17B.

RE: "I would think that AMD goes to $36 before INTC goes to $100"

I would think that AMD goes to $9 before INTC goes to $25.
And that's the problem with AMD: its commons act like options.

And Intel leaps appear to be more attractive than AMD commons.

Amy J
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