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

To: kapkan4u who wrote (88080)	9/13/2002 10:02:38 AM
From: Dan3	Respond to of 275872

Check out the URL at this post: aceshardware.com home.planetinternet.be

To: kapkan4u who wrote (88080)	9/13/2002 8:45:21 PM
From: Petz	Respond to of 275872

kap, re: 1B cash and 1B current liabilities. Current assets are about 1B more than current liabilities, so I think that 1.1B cash won't be disappearing soon. Accounts payable is very low. If AMD were in a cash crunch, they'd let that grow. Petz

To: kapkan4u who wrote (88080)	9/15/2002 7:58:00 PM
From: Eric K.	Read Replies (1) \| Respond to of 275872

Re: Last time I looked, AMD had about $1B in cash and $1B in current liabilities. With negative cash flow I wonder how long it will be before the Wall Street starts screaming about AMD's liquidity situation. It's not accurate to count accounts payable against them, but not credit them for accounts receivable and other current assets (this isn't telecom-- Compaq, Sony, the diy shops, etc. will pay the amounts they owe to AMD). The financial picture as of June 30 is $2.42B in current assets and $1.17B in current liabilities. I don't think there is any debt due until about 2007, so, outside of interest (which is subsidized-- 4 3/4% on the convertible notes and low on the German government loans), we don't need to worry about it. In short, AMD basically has $1.2B to burn as of q2. 2002. The important thing, from the perspective of liquidity, is not the actual loss, but the cash flow and change in assets. $357M of last quarter's expenses were depreciation and amortization. If we assume that AMD spends as much today on cap-ex as it did in the past, as reflected in Depreciation and Amortization, then we can just assume a $200M per quarter burn rate, which would suggest about 4 quarters until Wall-Street started complaining about liquidity. However, AMD's q2 tang. book and current net worth did not significantly change relative to q1, even though there were no new loans taken, which suggests that AMD is putting off cap-ex spending or is spending less on it than it did in the past. Given that Dresden is mostly outfitted and the 300mm fab isn't costing much yet, it seems likely that actual cash burn is less than the net loss figure. How long this can be sustained is an open question though. Anyway, I think AMD has until q2 of 2003 before Wall Street starts talking about liquidity concerns. This assumes there isn’t another downturn in flash or computer purchases. Re: I can't figure out any entry point right now that I would be comfortable with I think you're being excessively pessimistic here. Athlon came out in a marginal way, being a paper release until several months after its formal launch, and this after several delays already. AMD is certainly in a bent-over-waiting-for-punishment position right now; however, I think as the stock continues to get butchered based on continued hemorrhaging of money, a good buy target will likely come around the end of the year to the beginning of next year. OTOH, I don't think I'd be particularly uncomfortable picking up AMD at ~$6 after this quarter's earnings. In any case, it'll probably be safe to wait on purchase until we get some real, full-speed Hammer benchmarks. Wall Street tends to be slow-to-get-excited about AMD, with the Athlon run-up not occurring until quite a bit after it was clear that the product was good. -Eric