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

To: plantlife who wrote (210979)	9/15/2006 1:49:10 PM
From: jspeed	Read Replies (1) \| Respond to of 275872

you got caught in a (momentum) initiated hurricane My post-mortem on all this was as follows: The $42 share price was not unreasonable given the earnings and growth projections. Proof of that will be when AMD returns to that level in the near future. Five factors caused the share price slide. First, there were new competitive products from Intel. Second, there was a price war (aka Intel trashing it's P4 brand). Third there was a cyclical rotation out of tech on the belief that an economic downturn was imminent. Fourth, there was some massive insider selling ($10M by Ruiz) that triggered the downturn. Fifth, there was an automatic discount due to dilution/debt on the ATI merger. Finally when you have this much apparent risk, hedge funds will show up and short like crazy to capitalize on investor panic. I think realistically that the competitive things that Intel was doing should have knocked the price target down to $30-35. But the market sentiment can't be ignored when you are in tech. If the market thinks a downturn is coming, you have to reduce your tech position. Lastly, insider selling is management's way of telling you that the stock price is going to down.