Wednesday, November 28th 2012

AMD Plans to Sell and Lease-Back its Austin Campus

In an effort to raise cash in crunch-time, AMD plans to sell its Austin Texas campus (aka "Lone Star Campus") for around $150M to $200M. The company would then lease the campus back for 12 to 15 years. The 58-acre campus was built for at a cost of an estimated $270 million, and opened in 2008. Company spokesman Drew Prairie, in a statement to Reuters said "There are favorable economic conditions in the part of Austin where the campus is located," adding "Contingent on finding an investor who wants to do a multiyear lease-back, it's a good opportunity for us to unlock the value of the real estate to fund operations."

Sources: Reuters, The Verge
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33 Comments on AMD Plans to Sell and Lease-Back its Austin Campus

#1
[Ion]
WCG Team Assistant
This is really sad to hear :(
I like AMD, and I don't want them to struggle like this :(
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#3
Absolution
News such as this and Intel planning to release CPU's soldered onto mobos, the future looks bleak.
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#4
WarEagleAU
Bird of Prey
a lot of companies do this and a lot of the times it doesn't make sense. Sure was that way when I was working at Navistar Diesel. They went from owning the building, to selling to Verizon (yeah which doesn't make sense) To buying it back and then selling it back to them and leasing for a longer time. The reason being it is cheaper (Taxes, costs, maintenance) than owning it themselves. I suppose this is the same for AMD even though they take a hit on the cost of building it and selling it.
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#5
btarunr
Editor & Senior Moderator
Buy FX "Vishera," they're decent.
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#6
NC37
What he said ^^
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#7
Steevo
I have bought almost $1000 in CPUs in the last few weeks from them, and a few hundred in GPU's. I'm too poor right now to upgrade my rig.
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#9
Melvis
Dont worry im doing my part, bought and sold 4 AMD systems this past 2 weeks (3 that are Trinity APU's) and ill be getting a 8350 in the next few weeks.

Gimmie a few more yrs and this town of 3000 people will all be running AMD's Muhahahahhaa :laugh:
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#10
TheGuruStud
by: Melvis
Dont worry im doing my part, bought and sold 4 AMD systems this past 2 weeks (3 that are Trinity APU's) and ill be getting a 8350 in the next few weeks.

Gimmie a few more yrs and this town of 3000 people will all be running AMD's Muhahahahhaa :laugh:
Is it anything like with what I had to put up with back in high school/college?

"AMDs run hot and don't perform" Says the clowns trying to sell pentium 3s and 4s :shadedshu
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#11
Melvis
by: TheGuruStud
Is it anything like with what I had to put up with back in high school/college?

"AMD's run hot and don't perform" Says the clowns trying to sell pentium 3s and 4s :shadedshu
:roll: Yep you are spot on, that's exactly what's happened, all i see is P4's even today, its so sad. your also right about the heat thing as well, ive had to deal with that BS for so many yrs and try to convince them that noooooo your P4 runs a lot hotter then a AMD and slower, oh BS they say. :rolleyes:

Today is a bit different though, the new Intel CPU's are pretty good in both those areas now so, what can ya do? :ohwell:
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#12
Jack1n
How can this be? Theire gpus are selling like candy and apus seem to be doing quite well?
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#13
TheGuruStud
by: Jack1n
How can this be? Theire gpus are selling like candy and apus seem to be doing quite well?
They don't finish the chips on schedule (lost revenue), then TSMC and GloFo suck at making complex chips. Time and money is wasted in the fabs, then more money wasted/lost b/c production is too low for demand, then reputation and consequentially revenue takes another hit b/c the clock speeds aren't high enough and power consumption is too high.

The designs aren't really flawed (plenty of things need fixed in BD but), it's all execution problems.

Add on the Juggernaut still using coercion and billions of dollars of "marketing" money and you have a recipe for an impending disaster.

There's more to it than that (like bad management period lol), but every time what it comes down to is execution with themselves and partners.
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#14
drdeathx
Wouldn't it be funny if Intel bought the campus and leased it to AMD.
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#15
cdawall
where the hell are my stars
by: drdeathx
Wouldn't it be funny if Intel bought the campus and leased it to AMD.
I rather hope that they do would be the first good thing Intel did in a history of some somewhat shady business practices that put them in one heck of a predicament.
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#16
remixedcat
and I just bought Intel and Nvidia....
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#17
lemonadesoda
AMD needs to cut overheads. Selling assets but then increasing costs (rent) isn't a clever thing to do economically. For a company making loses, it isnt about hiding taxes. Seems that the banks dont want to lend to AMD anymore... and they are so desperate for cash... they will sell their real estate. It was a 1990's MBA finance trick for window dressing accounts. In 2012, it means the company is knocking on bankruptcy door/Chapter 11.
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#18
DannibusX
by: lemonadesoda
AMD needs to cut overheads. Selling assets but then increasing costs (rent) isn't a clever thing to do economically. For a company making loses, it isnt about hiding taxes. Seems that the banks dont want to lend to AMD anymore... and they are so desperate for cash... they will sell their real estate. It was a 1990's MBA finance trick for window dressing accounts. In 2012, it means the company is knocking on bankruptcy door/Chapter 11.
...or a company doesn't want to pay the property tax bill or the maintenance costs while raising a chunk of capital at the same time?
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#19
RCoon
Forum Gypsy
A lot of companies have started doing this, selling their HQ and renting it back out again. Only recently Nokia did the same didnt they? A lot of businesses, including thriving ones, would rather rent property than own it.
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#20
lemonadesoda
by: DannibusX
...or a company doesn't want to pay the property tax bill or the maintenance costs while raising a chunk of capital at the same time?
Er, did you really type that? Any property tax bills and maintenance costs are not paid "for free" by the new owner. The owner recovers those costs directly through maintenance charges to the leaseholder or indirectly through higher rents.

Raising capital? The property is already on the balance sheet of AMD and therefore is capital already. What you mean is convert a capital asset into cash... because AMD is desperately short of cash. Why? For 3 reasons: 1) Not enough income, 2) Costs too high, 3) Banks are calling in loans and not making new loans

by: RCoon
A lot of companies have started doing this, selling their HQ and renting it back out again. Only recently Nokia did the same didnt they? A lot of businesses, including thriving ones, would rather rent property than own it.
Companies have not just started doing this. This financial strategy started in the 80's. You do it for one of six reasons: 1) You have to sell your capital assets for cash because you are running out of cash, and nobody will give you cash, or 2) You believe the property market is going to fall, so you sell now to buyers who are still ready to buy, or 3) You are playing a financial game through your accountants... to window dress your accounts, to show higher liquidity on your balance sheet, reduce your debts, show higher RoE, 4) A tax strategy, 5) Your cost of borrowing (loan interest rate) has gone up, and you can't afford to service more loans, so you don't take any more loans, but sell your assets to raise cash, and FINALLY 6) Your investment banker or real estate advisor encouraged you to do it... property transactions mean a BIG TRANSFER in money and commissions... and just like lawyers... there is always a vested interest.
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#21
Deadlyraver
Wow, shame to see that happen. Hope AMD gets some traction before their wheels start spinning.
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#22
tacosRcool
maybe if salespeople would stop selling avg people i7s and other things that they would never use, maybe AMD would be better.
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#23
de.das.dude
Pro Indian Modder
AMD is perfect for 80% of the people. only few people really require the performance of intel.

i had this friend who i was pressurising to buy a amd setup (he doesnt know english, and knows nothing about computers)

so he went to a fool, and they bought a i5 2600K. i was like wtf.
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#25
Konceptz
Its cheaper to rent office space then it is to own it... owners have to maintain it, fix something when it breaks etc...

AMD will be fine, all the next gen consoles are AMD powered, the new chips are selling from what I understand. 8000 series GPUs around the corner....AMD will pull through its just a matter of time.
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