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Technology Stocks : Advanced Micro Devices - Moderated (AMD) -- Ignore unavailable to you. Want to Upgrade?

To: chic_hearne who wrote (10428)	9/27/2000 4:22:19 PM
From: niceguy767	Read Replies (1) \| Respond to of 275872

chic: Hope you sold those puts today...I don't like the odds of of any longevity on the plus side on them!!!

To: chic_hearne who wrote (10428)	9/28/2000 8:36:53 AM
From: Monty Lenard	Read Replies (3) \| Respond to of 275872

Chic, awhile back you asked me to give you some valuations on AMD. Just now getting around to it. Having to make some assumptions on earnings because there are none (to speak of) so anyone wanting to shoot holes in this can give me an earnings number of their own. I used 25 million. Based on that using a discount rate of 11% and an industry 10 year growth rate of 37% here goes: Given the above earnings and discount rate, AMD must grow earnings at a rate of 43.2% annually for 10 years to justify its current stock price of $24.00. If we assume initial earnings of $25.0 million grow at a rate of 37.08%, and we discount those future earnings at a rate of 11.00%, we arrive at a net present value for the company's next 10 years of earnings of $953 million. To account for potential earnings beyond the 10th year, we estimate a growth rate of 6.00%, a discount rate of 12.00%, and we arrive at a continuing value of $4.71 billion. To complete the calculation we add these two figures together, subtract the long-term debt for AMD ($1.48 billion), and divide by the outstanding shares (311 million) to get a per share intrinsic value of $13.43. FWIW, Monty