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

To: dougSF30 who wrote (227967)	3/12/2007 11:33:24 PM
From: Sarmad Y. Hermiz	Read Replies (2) \| Respond to of 275872

>> How long do you think until AMD announces some desperate plan or other to raise cash? First, one has to seperate accounting loss from cash loss. We have not spent any effort on that here. And analysts have not estimated the cash loss, either. By cash measure, write-downs are harmless. Selling inventory for loss is also harmless. So I don't think q1 and q2 operating cash losses are what will hurt AMD. Those losses will be small. maybe $100m. There will be plenty of cash left to cover that. The real issue is whether AMD can stay on their capital equip spending plan ? I think they can, at least until q3, when they will try to use the pending intro of Barcelona to drum up interest in a stock offering. As golfbum showed, any new borrowing will not help. First it will be at junk-bond rates. And second 100% of proceeds have to go to retire existing notes. Only a stock sale will do. Also, Aleph is very mistaken in thinking that if AMD stock price is $10/sh, that an additional 200m shares can be sold at 10. Very likely, the mere fact of selling new shares will drop the stock price so that total market cap is constant - incl new shares. Barcelona is the only hope. Otherwise, the stock price will be in mid single digits.