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

To: muzosi who wrote (228158)	3/15/2007 11:44:53 PM
From: seti	Read Replies (1) \| Respond to of 275872

let me see here: before sale amd's market value is 555M (stock float) * $14 = $7.77B; after sale it's 2 * 555M * 14 = $15.540B. now they just have to find someone who would pay the extra $7.77B for the new 555M shares. For normal companies that make money, all else being equal, doubling the number of shares halves the EPS, and thus halves the stock price. On the other hand, a company like AMD is valued at some combination of book value and probability of survival. So in some perverse and unlikely way, bringing in more cash increase the probability of survival thus increasing the share price. I'm not advocating this line, but just putting forth a far out argument.