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

To: chic_hearne who wrote (108090)	4/27/2000 2:03:00 PM
From: brushwud	Respond to of 1573924

I don't get this "authorized enough shares". If you do a 2 for 1 split, why do you need to authorize shares? Check out AMD's 10-K. As has been previously discussed, AMD has 250 million shares authorized. There are 152 million shares outstanding and, also according to the 10-K, options (including conversion options from the Subordinated Notes) exist on over 40 million shares. With today's approval of an additional 7.5 million shares for employee stock options, the total of shares outstanding and options granted is about 200 million. In order for AMD to split 2-1, at least 400 million shares need to be authorized & probably more to give them a little bit of headroom. The business of authorizing more shares is just a little procedural detail, but it must be approved by shareholders. Frankly, I'm surprised AMD didn't get it into the proxy this year. Intel did, and they haven't announced any split yet. They're just prepared in case they want to issue more shares.

To: chic_hearne who wrote (108090)	4/27/2000 2:14:00 PM
From: Greater Fool	Respond to of 1573924

>>why do you need to authorize shares A stock split is a stock dividend. You have to have the shares authorized in order to issue them as a dividend. Makes one wonder how they run a reverse split. Does the company tell the shareholders they have to send back half of their shares? Or do they exchange them for new shares?

To: chic_hearne who wrote (108090)	4/27/2000 2:29:00 PM
From: John Farrell	Read Replies (1) \| Respond to of 1573924

Chic, Authorized shares are part of the agreement between a company and it's share holders. When a company IPOs, they issue a certain amount of share in the company for a particular price. The shareholders buying the stock have a general idea of stock volatility and momentum based on the share price and how many shares there are. Some investors only like to buy/sell/hold shares in certain price ranges, for example, many people don't like getting into stocks that have single digit stock prices and others don't like getting into stocks that have triple digit share prices. Say the company IPO's 50 million shares at $10 a share with an authorization of 250 million shares. The company can use the 200 million shares that aren't yet issued to acquire other companies, to issue to employees in employee stock purchase plans or in incentive stock option plans, or for stock splits. Thus, the company would have shareholder approval for issuing those non-issued shares which is called share dilution as the Earnings Per Share is effected by their being issued. The shareholders are voting, with their investment, that the company will wisely use those "authorized" shares. If the example company above acquires another company for $50 million in stock, and the stock is still at $10 share price, that's 5 million shares, so the new outstanding shares for the company would be 55 million of it's 250 million authorized shares. They would have to dilute their earnings over more shares and a stock holder's investment is effected positively or negatively based on if the purchase of the second company adds earnings or causes losses. Since the company now has 55 million shares issued, they wouldn't be able to issue a 5 for 1 stock split as that would require them to be authorized by the share holders for 275 million shares. The company could do a 2 for 1, 3 for 1, or 4 for 1 though, or maybe two 2 for 1 splits without having to ask the share holders (owners) for authorization, since they had already given that authorization when they bought the stock. As a shareholder, you give the company purchasing power of authorized shares (similar to a credit line) to buy other companies or reward it's employees or attract new employees. -John