Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Goutam who wrote (106196)	4/17/2000 12:33:00 AM
From: tejek	Respond to of 1575804

IMHO, Intel is more afraid of AMD share price going higher than the products that AMD has in its pipeline. In the past the doubts expressed by many analysts have clear signature of Intel FUD on them. The doubts were also similar to the FUD spewed here on this message board. My question to the thread is, what exactly is Intel afraid of if AMD share price goes high? What are the disadvantages of higher AMD share price (from Intel perspective)? Goutama, I think there are at least 2 reasons; two reasons which hurt in different ways. The share price gives AMD a higher valuation, facilitating the borrowing of funds. AMD has always been short of $ with which to fight Intel. Now they are developing a cash reserve and at the same their ability to borrow has improved dramatically. AMD is not at Intel's mercy as much.....it has much better resources with which to fight back. Another reason is one that effects Intel's corporate ego....the unspoken rule goes, the higher the stock price, the more successful the company. For a long time, AMD's stock languished in the high teens while Intel was between 50 and 100. Now for the first time there is a possibility that the companies will have stock prices that are tied with each other. Psychologically, the tieing of the 2 stocks prices makes it appear that the performances of the two companies are pretty much equal as well. Interesting development, don't you think? Got to be a hard one for Intel to swallow. ted

To: Goutam who wrote (106196)	4/17/2000 12:48:00 AM
From: minnow68	Read Replies (1) \| Respond to of 1575804

Goutama, If I were Intel, I would be scared silly of AMD getting a high stock price. Let's assume Wall street falls in love with AMD and in six months AMD is trading between 900-1000 per share. AMD could issue 2 million new shares (only about 1% dilution), and quick as you can say "BAM!" AMD is taking the wrapping paper off a brand new fab. A high share price gives a company interest free access to capital. What would happen to Intel if Athlon/Mustang is about the same performance as Willy, Sledgehammer is faster, and AMD built half a dozen new mega-fabs? Mike

To: Goutam who wrote (106196)	4/17/2000 12:55:00 AM
From: Cirruslvr	Read Replies (3) \| Respond to of 1575804

Goutama, The other day you were asking for K6-2 ASP in Q1. According to JC's trancriptish, jc-news.com K6-x ASP was "essentially" the same as Q4. Petz calculated K6-2 ASP to be ~$55 in Q4, so I guess that is the number you should use to calculate the winners. I'm not too sure about Athlon ASP. Jerry also said blended ASP was nearly 10% higher than in Q4. I think ASP in Q3 was about $80. So assuming Q1's ASP was about 8.5% higher than in Q4, Athlon ASP was ~$225. Does anyone else want to take a shot at the numbers?

To: Goutam who wrote (106196)	4/17/2000 2:05:00 AM
From: Dan3	Respond to of 1575804

Re: what exactly is Intel afraid of if AMD share price goes high?.... If AMD stock flies, Intel will probably stagnate for awhile. As a rough guess, if the employee stock program (which costs Intel relatively little) saves them 20K per employee in salaries they would otherwise have to pay, it's worth $1.4 Billion to them. Similarly, if AMD options start looking golden to current and potential employees, it could save AMD hundreds of millions of dollars and attract talent that might otherwise go elsewhere. Regards, Dan