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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Paul Engel who wrote (32566)	5/9/1998 7:30:00 PM
From: StockMan	Respond to of 1572531

Re -- they also have $517 Million WORTH OF ADDITIONAL DEBT. No one will want to buy AMD anymore. Their debt/asset ratio will soon be > 1. Anyone noticed that AMD's property plant and equipment value is always increasing. Seems to me AMD is just adding to the $value while not effectively increasing the real value with all that old equipment, from 95. Also .25u will be obsolete next year. AMD will have to PAY someone to take this company off their hands. Stockman

To: Paul Engel who wrote (32566)	5/9/1998 7:55:00 PM
From: Xpiderman	Read Replies (1) \| Respond to of 1572531

>>greg - Re: " AMD gets another $517 million of equitity @ 37.00 a share. " No they DON'T! That is ONLY the CONVERSION PRICE! Except for fools (you can include yourself, if you want to), nobody will convert the bonds to shares at $37/share for the share price below $37. Thus, the stock will have to rise above $37 for people to make the conversion. And don't forget - AMD may have $517 worth of additional EQUITY, but they also have $517 Million WORTH OF ADDITIONAL DEBT. Paul<< Paul, The $37 conversion price will also be a heavy resistant to AMD stock price. Because the debenture buyers will short AMD shares to lock-in profit, and keep the convertible bound to collect interest from AMD. Actually, the convertible bound holders do not have to wait AMD to reach the conversion price, they can short AMD anytime, without much risk, to lock-in profit and collect interest from AMD. Someone in APM thread did this when APM was very high: short APM using convertible as a hedge, and keep the convertible debenture to collect interest, then cover the short position later at a lower price.