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

To: Petz who wrote (36771)	4/20/2001 11:51:27 AM
From: niceguy767	Read Replies (2) \| Respond to of 275872

John: Couldn't pull up your graph for some reason... By the way have you tried www.superstarinvestor.com for graphs?

To: Petz who wrote (36771)	4/20/2001 12:04:33 PM
From: Petz	Read Replies (3) \| Respond to of 275872

It was kind of a surprise to me that AMD did not repurchase any shares. If they spent 300M, eps would have been a penny or two higher this quarter and the rest of the year. It also makes "beating the street" that much more impressive, since I assume most of them had figured on it. More importantly though, there's 3 ways to interpret the non-buyback: 1. AMD (JS in particular) never intended to buy back shares -- the announcement was done only to support the share price. 2. AMD thought that in a worst case slowdown, they would need the money just to support their capital spending program (Not likely, they have 60% more cash than their Y2001 cap ex plan). But AMD did make a comment that they would use their cash to "buffer against the foolish moves of a competitor." (see JC's transcript of CC) 3. They think there is a chance they can build another fab with cash on hand plus only a modest amount of additional debt. Personally, I think it started out as #1. But why not sell equity at >$30 a share to build a new fab when you've previously retired shares at $20 a share? If the price is not $30 or higher at the end of the year, then it will probably be because performance wasn't good enough to be able to use debt-only financing. So, I think they made a mistake not buying back shares in the teens. Petz