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

To: wanna_bmw who wrote (78699)	4/28/2002 10:50:24 PM
From: Robohogs	Read Replies (1) \| Respond to of 275872

Pretty soon all those profits are going to disappear (20-100+% hits) as new Congressional and/or FASB rules come in to force subtractions for options expense. AMD and Intel will both get hit badly earnings wise. That is what people are pointing to here except that AMDroids (as you call them) ignore the fact that AMD is handing out free stock options as fast as they can be printed. I might add that I was disgusted that not one tough question was asked of Jerry at the annual meeting. Finally, I am not sure AMD is having the problems with bin splits and yields being alluded to here and elsewhere. It appeared that only 5-10% of wafer outs were 130 nm and those later in the quarter. With 4,000 outs per week and 10% that would imply 400 outs per week at 130 nm or 5,000 or less total (since average appeared to be under 10% for quarter). At any reasonable yields, 1 MM die seem possible and that is pretty small compared to 8 million of sales per quarter and the 5 mm plus units which must be in inventory judging by inventory levels (assuming more than half of inventories are MPU-related and cost is in the $20-30 per unit range). So any initial process problems would have been magnified with the small runs. Jon

To: wanna_bmw who wrote (78699)	4/28/2002 11:18:37 PM
From: Ali Chen	Read Replies (1) \| Respond to of 275872

wbmw, "Stock buyback goes towards employee stock bonuses, a necessary compensation if you want continued positive results from your work force." Here we are, back to the original thesis: stock buyback is "a necessary compensation" for labor, as a part of sustaining the business. Good. (BTW, what the heck yours "buyback goes towards" mean? You promise to an employee an option to buy your company stock at $5/share, do you? The guy/gal worked hard over the years, and elected to cash out the options today, right? You issue few new certificates, and get $5/share, and you recognize this as a revenue BTW. However, it dilutes the stock, and at 3% per year of option issuance rate stockholders are not happy with this, so you decided to buy those shares back, at market value of $30. You even can think that you bought back exactly the same certificates, for simplicity. So, $25 "goes towards" nowhere, into a labor expense that is not recognized as such in GAAP earnings. Period.) "However, their revenue minus yearly expenses is still a positive number" Are you sure about that? Even if you subtract those $4B/y? (and I am not nitpicking about "one-time" acquisition charges). Maybe you need to look at, say 4Q01? - Ali