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

To: niceguy767 who wrote (82913)	6/19/2002 1:34:46 PM
From: wanna_bmw	Read Replies (3) \| Respond to of 275872

Niceguy, Re: "If AMD has 50% of a $35 billion pie, I doubt very much if you'd see an AMD market cap of $3 billion... Check your airlines market caps again..." The airlines are all on the verge of bankruptcy. You want AMD to be like them? Chomolungma is right - AMD's business model is to gain market share by lowering prices, and stretching profit margins thinner and thinner. They have twice as much market share as they did in the K6 days, and they are still losing money by the barrel full. Sure, they have the potential to gain more in market share, but if that's all you want, then enjoy the losses! wbmw

To: niceguy767 who wrote (82913)	6/19/2002 2:11:24 PM
From: chomolungma	Read Replies (3) \| Respond to of 275872

If AMD has 50% of a $35 billion pie, I doubt very much if you'd see an AMD market cap of $3 billion and I doubt very much if you'd see an INTC market cap of $130 billion...Check your airlines market caps again... AMR: Market cap $2.8 Billion, 2001 Revenue $19 B, P/S =.15 DAL: Market cap $2.7 B, 2001 Revenue $14 B, P/S = .19 UAL: Market cap $690 Million, 2001 Revenue $16 B, P/S = .04 So you have the three biggest players with an average price/sales ratio of .13. If your new AMD with half of a $30 billion market has a P/S ratio of .13, it would have a market cap just under $2 billion. That's a third lower than it is right now. That's your dream scenario? Like I said, it's a nightmare of a business plan. Just for comparison, look at Southwest's P/S ratio. It is a healthy 2.2. The difference? Southwest is constantly profitable. If AMD would give up the quest to "be like Intel" and just strive to make a nice profit margin, I have no doubt they would be rewarded by the market.