Friday, July 17th 2015

AMD Now Almost Worth A Quarter of What it Paid for ATI

It's been gloomy at the markets in the wake of the European economic crisis. This along with a revised quarterly outlook released by the company, hit AMD very hard over the past week. The AMD stock opened to a stock price of 1.87 down -0.09 or -4.59% at the time of writing this report, which sets the company's market capitalization at $1.53 billion. This is almost a quarter of what AMD paid to acquire ATI Technology, about a decade ago ($5.60 billion). Earlier this month, AMD took a steep fall of -15.59%, seeing its market cap drop by a quarter.

Intel is now worth $140.8 billion (92 times more), and NVIDIA $10.7 billion (7 times more). Among the issues affecting AMD are decline in PC sales and stiff competition. However, reasonably positive earnings put out by Intel disproves AMD's excuse that the market is to blame for bad performance, and the company could slide even further, hitting its all-time-low at the financial markets. The company will host an earnings call later today.
Source: Google Finance
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136 Comments on AMD Now Almost Worth A Quarter of What it Paid for ATI

#1
THE_EGG
:'(

I guess their accounting team must be FURYious.
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#2
cyneater
AMD needs to make products people want to buy....

And processors that can perform well and are priced well....

The Athlon 64 was released over 10 years ago It was a Pentium 4 killer...

AMD needs another Athlon 64.... Or they could go the way of mips and SGI
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#4
The Von Matrices
Considering how AMD overvalued ATI in 2006, I don't think the disparity in assets is as bad as the 4x difference in market capitalization would suggest.
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#5
Frick
Fishfaced Nincompoop
I'm seriously considering buying stock for the heck of it.
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#6
HumanSmoke
The Von Matrices
Considering how AMD overvalued ATI in 2006, I don't think the disparity in assets is as bad as the 4x difference in market capitalization would suggest.
Indeed. A year after the acquisition, the combined company was worth half its combined (pre-acquisition) value, thanks to AMD's gross over-valuation of ATI worth, and the $2bn worth of debt AMD saddled itself with buying ATI. Having said that, AMD's BoD and execs have been continually rewarded for underperformance. The occasional Chief [insert title] Officer gets the golden parachute treatment as a sacrificial lamb for the combined assent of the BoD's signing off on whatever strategies are in vogue at any given time, but generally it's business as usual.
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#7
Caring1
Frick
I'm seriously considering buying stock for the heck of it.
Hahaha, did you know shareholders are responsible for debt? You have a few spare billion?
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#8
Frick
Fishfaced Nincompoop
Caring1
Hahaha, did you know shareholders are responsible for debt? You have a few spare billion?
I have no idea how it works, I just figured it would be nice to have like two shares of AMD.
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#9
natr0n
They need to pull shit out of there hats quick cause this show is almost finished.

We keep waiting for something to happen and let down over and over.

Intel already has an answer to anything AMD can think of at this point.
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#10
Xaled
They had some excellent cards right in time, 79xx and 29xs, but their marketing-pricing management were the worst it could be, i really start to think that AMD's managers since 7970s time are some nvidia guys who did almost every thing possible just to kill excellent series like 7xxx and 29x by horrible marketing and pricing
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#11
Easo
Damn... Well, the less they cost, the sooner someone realy might buy them.
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#12
de.das.dude
Pro Indian Modder
Frick
I'm seriously considering buying stock for the heck of it.
same XD
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#13
john_
The period after the Lehman Brothers collapse, AMD's valuation was under a billion if I remember correctly. They are still alive.

They have enough money to survive the next year until Zen arrives and they will also probably see an increase in their income from GPUs in the next one or two quarters. The fact that TSMC is lowering the prices of 28nm by 10% will help them to make a little extra profit. Intel is also slowing down, so the only question mark is Zen's IPC performance and efficiency. If they come out with something at least as good as Intel Haswell(too optimistic, probably Ivy Bridge would have been closer to reality), their share price and valuation will go much higher, because their products will become much more competitive than they are today.
Posted on Reply
#14
Assimilator
john_
The period after the Lehman Brothers collapse, AMD's valuation was under a billion if I remember correctly. They are still alive.

They have enough money to survive the next year until Zen arrives and they will also probably see an increase in their income from GPUs in the next one or two quarters. The fact that TSMC is lowering the prices of 28nm by 10% will help them to make a little extra profit. Intel is also slowing down, so the only question mark is Zen's IPC performance and efficiency. If they come out with something at least as good as Intel Haswell(too optimistic, probably Ivy Bridge would have been closer to reality), their share price and valuation will go much higher, because their products will become much more competitive than they are today.
AMD can't keep haemorrhaging cash by selling CPUs and APUs at a loss or minor profit. They need a product that they can make high % of profits on. Unless Zen beats Skylake, it won't be that product, and AMD's CPU division will be done.
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#15
HumanSmoke
Assimilator
AMD can't keep haemorrhaging cash by selling CPUs and APUs at a loss or minor profit. They need a product that they can make high % of profits on. Unless Zen beats Skylake, it won't be that product, and AMD's CPU division will be done.
You'd think that at this stage, AMD need Zen to do a Conroe on Intel. Even performance parity (and that is a huge ask) with Intel's current line-up will still see Intel outselling AMD in every market that counts. AMD not only have to wait for Zen to arrive (hopefully) in Q3 2016, but to remain big enough, and to retain enough R&D finances and personnel in the meantime to take advantage when it arrives.
I'm guessing that AMD will have to deliver unequivocally - performance as advertised, on time, and fully supported (feature set, firmware, drivers, production ramp) for OEMs to hitch their wagons to AMD's star....and hope like hell Intel slip up.
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#16
TheLostSwede
cyneater
AMD needs another Athlon 64.... Or they could go the way of mips and SGI
You do know MIPS is still around and are in fact on the rebound with some help from Imagination Technologies who bought them a couple of years ago, right?
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#17
eroldru
With fanboys all over the place and wrong information given by reviewers and review sites, AMD is taking heavy shots.

I'm always very careful not to make the wrong judgement, but Intel has been playing with the desktop customer for more than 2 generations. Crappy CPU assembly and minimal performance gains are very bad for their name, but people still buy them like candy. Just yesterday I was testing an i7-4770 on stock speeds and priming temps were more than 100C with an air conditioned room, while in the same room an 8350 @ 4.5GHz did not even reach 60C, while gaming performance was identical. and the price is 3 times less.
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#18
Dent1
eroldru
With fanboys all over the place and wrong information given by reviewers and review sites, AMD is taking heavy shots.

I'm always very careful not to make the wrong judgement, but Intel has been playing with the desktop customer for more than 2 generations. Crappy CPU assembly and minimal performance gains are very bad for their name, but people still buy them like candy. Just yesterday I was testing an i7-4770 on stock speeds and priming temps were more than 100C with an air conditioned room, while in the same room an 8350 @ 4.5GHz did not even reach 60C, while gaming performance was identical. and the price is 3 times less.
Don't waste your time, everyone here will conveniently ignore the fact that your AMD performs identical to your Intel for cooler and cheaper.
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#19
the54thvoid
Dent1
Don't waste your time, everyone here will conveniently ignore the fact that your AMD performs identical to your Intel for cooler and cheaper.
Fanboys aside, the share price drop is indicative of the mass perception and market belief that AMD are no longer delivering a solid product.
The geeks here are an insignificant minority in the global market. AMD's decline can only be blamed on fanboys if you are one yourself. Stocks don't listen to fanboys, they listen to market presence and profitability.
It's brutally naive to assume AMD's decline is anything other than lack of product and lack of product perception, combined with possible major mismanagement.
This is not a third party fault. Similarly, Intel do just enough to stay far out in front. AMD's lack of product threat means they can work on minimal R&D expenditure with minimal product improvement.
Don't get me wrong (if you do you're illogical) I don't want AMD to disappear. Competition is required for better service and product. I want to see AMD taken over and used properly to create segment desirable products, across a whole range of applications.
They're not done yet but they're getting really close to it.
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#20
FordGT90Concept
"I go fast!1!11!1!"
natr0n
Intel already has an answer to anything AMD can think of at this point.
Except high-end GPUs. I'm beginning to think AMD should either sell or drop its CPU business and focus exclusively on GPUs where they can compete.
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#21
63jax
omg, green and red fanbois must be really ecstatic now! this is all they want, with AMD gone will have world peace, no more abortions, Kim will move to US, etc, keep it up fanbois!
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#22
HumanSmoke
Dent1
Don't waste your time, everyone here will conveniently ignore the fact that your AMD performs identical to your Intel for cooler and cheaper.
...and yet even AMD help Intel's cause by using Intel system builds for their GPU press deck benchmarks. If AMD don't have faith in their own platform, should you expect OEMs to?
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#23
the54thvoid
FordGT90Concept
Except high-end GPUs. I'm beginning to think AMD should either sell or drop its CPU business and focus exclusively on GPUs where they can compete.
Come back ATI!
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#24
SK-1
They had all the deals with console vendors? WTF? Did they give their GPU's away?
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#25
FordGT90Concept
"I go fast!1!11!1!"
john_
The period after the Lehman Brothers collapse, AMD's valuation was under a billion if I remember correctly. They are still alive.
AMD was plummeting long before the 2008 subprime mortgage bubble burst. I said back in 2006 that buying out ATI was the dumbest thing AMD could do. Proven correct, I was.

AMD was a good company from about 1997-2005 (K6 to K8). Before and after, not so much.
SK-1
They had all the deals with console vendors? WTF? Did they give their GPU's away?
They likely only make pennies on the dollar for every unit shipped and Global Foundries probably gets most of the profit margin. AMD killed itself when it was forced to sell its foundries.
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