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

To: that_crazy_doug who wrote (34715)	4/3/2001 3:23:54 PM
From: milo_morai	Read Replies (1) \| Respond to of 275872

<font color=green>CeBIT coverage overview</font> xbitlabs.com excellent summary in case anyone here missed it. Milo

To: that_crazy_doug who wrote (34715)	4/3/2001 4:14:18 PM
From: brushwud	Read Replies (1) \| Respond to of 275872

Does anyone know if AMD actually ended up buying any of their stock back, or if they just recieved permission to do so, and never followed through. I don't know for sure and I don't think there is any way for anyone else to know either, without having inside info. Their last 10-K (dated February 26) does not mention any actual buybacks, so my suspicion is that they have not bought back a single share. Perhaps their next 10-Q (mid-May) will have additional info. One reason which has been suggested for the repurchase authorization is to help AMD qualify to call its Convertible Subordinated Notes as early as possible. According to the registration statement for those securities: sec.gov "The Notes are redeemable, in whole or in part, at the option of the Company, at any time on or after May 15, 2001, at the redemption prices set forth herein [$18.50 adjusted for last year's split], plus accrued and unpaid interest to the date of redemption, if any; provided that the Notes will not be redeemable prior to May 15, 2002, unless the last reported sale price for the Common Stock is at least 130% of the then effective conversion price for at least 20 trading days within a period of 30 consecutive trading days ending within five trading days of the date of the redemption notice." There are approximately $500 million of these Notes outstanding and they pay 6% interest. AMD can call them on May 15, 2002 in any case and stop paying interest. But if AMD can call them on May 15, 2001, it will save them a year's worth of interest, $30 million. According to the quoted paragraph, the earliest AMD can call the Notes is May 15, which must be within five trading days of the end of a thirty-trading-day period. So my interpretation is that the earliest such thirty-trading-day period ends on May 9 and began on March 28 (assuming April 12 is a holiday for Good Friday). 130% of the conversion price is $24.05. AMD closed above that price last week on March 28, 29, and 30, and also yesterday. So they are 4/20 of the way toward meeting the requirement by May 9. If AMD closes above $24.05 for 16 more days up to and including May 9, then they will be able to force conversion on May 15. Note that 15 of those trading days follow the earnings announcement on April 18. I surmise that if AMD's stock price meets the condition on its own, then AMD will not buy back any stock and will save its cash for a new wafer fab. But it looks like it might be in their interest, if necessary, to bid up the closing price on enough days to meet the condition. On the other hand, a new thirty-trading-day period begins every day, so even if the Notes cannot be converted at the earliest possible time, perhaps they can be converted a week or a month later, which would still save them almost all of $30 million.