The AMD Execution Thread [2007 - 2017]

[Davros]

the profits they are projected to generate with the purchase of Minecraft are greater than what that money would have otherwise generated.

All that is beside the point, who in the hell buys a company at the rate of 20x its yearly income (was 130million gross or net ?)
q2 2015 amd had an income of just over 900million so if you say 4billion for the year that would mean amd is worth 80 billion at that rate yet google says its net worth is just over 3 billion.

 

[pMax]

All that is beside the point, who in the hell buys a company at the rate of 20x its yearly income

...anyone buying stocks on the NASDAQ I'd say.
But you'd consider the how much those 2.5bn$ would be AFTER taxes. Basically, the true price is the one after taxes - the difference is extra money you would have never gotten first hand, which you can afford to pay as 'free premium' in order to catch the deal.
Call it 'legalized bribe'.

 

[Razor1]

not exactly, buying stock can be a corporate expenditure as an investment to the corporation, Now for an individual they too can take a tax write off if you hold the stock for 5 years, I think it was, unless they made any changes to the time of holding.

http://yourbusiness.azcentral.com/can-s-corporation-invest-money-stocks-mutual-funds-27778.html

http://smallbusiness.chron.com/should-c-corporation-invest-taxable-municipal-bonds-62714.html

As for a C corp, the write a corporation takes when buying stock, usually won't be the full write of the entire cost of the stocks purchased, there is many loop holes in this which are dependent on time of investment, which I'm not aware of. In any case there is some cushion with this type of investment when taxes are concerned.

 

[Alexko]

All that is beside the point, who in the hell buys a company at the rate of 20x its yearly income (was 130million gross or net ?)
q2 2015 amd had an income of just over 900million so if you say 4billion for the year that would mean amd is worth 80 billion at that rate yet google says its net worth is just over 3 billion.

Mojang didn't make a lot of money, but it made money. Currently, AMD doesn't. A high revenue is nice, but ultimately, if you end up with a net loss, it's not worth much.

 

[Silent_Buddha]

AMD will fit right in the Surface/Winphone/Xbone division, then?

Two problems with that snarky comment.

Xbox division currently making a profit and has been for many years now.
Surface division currently making a profit and has been for over a year now.

You do have a point with Windows Phone, however.

Mojang didn't make a lot of money, but it made money. Currently, AMD doesn't. A high revenue is nice, but ultimately, if you end up with a net loss, it's not worth much.

Add to that Mojang is still growing with regards to profits. And not just slowly but rapidly. Take a look at the monthly NPD charts and both the XBO and PS4 versions are charting despite being single SKU titles in a multi-SKU chart. Just the PS4 version alone is selling better than most multi-platform games being released. Same goes for the XBO version. And that's just the physical copies. Who knows how much the digital versions are selling. PS4 version was released shortly after pending the sale of Mojang was leaked onto the internet. Same goes for the XBO. Both have gone a long way towards making back that initial purchase.

And that doesn't include continuing sales iOS/Android/PC, etc. Or the X360/PS3 versions which continue to sell well. Or additional revenue from server hosting. I'm assuming that MS is offering hosting services for Minecraft. Throw in increasing revenue from licensing the Minecraft property to 3rd parties for things like plushies and it's a buyout that at least makes sense in the long term.

And that's not even getting into the whole, "getting kids hooked on a Microsoft product at an early age thing."

They likely overpaid a bit, but it's still potentially a very good acquisition. Especially if they can leverage it to boost the sales of the eventual launch of the consumer version of Hololens in 2-3 years.

Regards,
SB

 

[eastmen]

If zen shows enough promise then who knows.

MS currently has

Surface 3
Surface pro 3
xbox one
using x64 chips.

But if the rumor is true we will see.

Surface mini with x64
Surface 3 with x64
Surface 4 pro x64 12 inch
Surface 4 pro x64 14 inch
Surface phone x64
xbox one


So I dunno , it could be worth it to MS . They can move to compete against fire sticks and what not along with portable devices and tons of other stuff.

I thin kthe question is how much it would cost them to get AMD

 

[Grall]

I thin kthe question is how much it would cost them to get AMD

Pretty cheaply. Some might say, embarrassingly cheaply... The only way AMD stock is going to go up from now on out, and at least until a new gen of GPUs come out and they benchmark favorably against NV same-gen offerings, is when there's rumored talks of buyouts. That's what, six months off? Maybe more, who knows.

 

[Squilliam]

Well I wouldn't mind them buying AMD. I think if they had an injection of cash they could do considerably better than they are now, and more competition never hurts in both the CPU/GPU arenas.

 

[Razor1]

Stock price wise they are cheap, and that would be the cheapest way for MS to take them over, hostile, but IP wise which is what MS really would want, they will be still expensive (its not what they are worth now, its what the potential they are worth in the future). So doing the regular negotiations and buy out, AMD might ask for more than what their stock is worth not to mention the tacked on debt.

This is what happened with AMD bought ATi, it was above ATi stock valuation as a corporation.

 

[A1xLLcqAgt0qc2RyMz0y]

Another day, another outlandish AMD buyout rumor

Why These Outlandish AMD Buyout Rumors Seem False

http://www.fool.com/investing/gener...umors-seem-false.aspx?source=eogyholnk0000001

Advanced Micro Drops 8%: Microsoft Buyout Unlikely, Says Citi

http://blogs.barrons.com/techtrader...unlikely-says-citi/?mod=yahoobarrons&ru=yahoo

 

[Alexko]

Everyone is talking about a buyout for some reason (well, that's what the rumor says, so I guess that's a reason) but I think it might make a lot of sense for Microsoft to invest a few hundred million dollars into AMD, not necessarily to gain control of them or cheaper access to their products, but simply to keep them alive, and to keep x86 competition healthy. After all, the PC remains Microsoft's bread and butter.

 

[silent_guy]

No, what you're missing is a little research over the subject.
Mojang was making around $130 million a year before the acquisition in late 2014.
For $2.5B this means that it'd take over 20 years to get the money back, assuming Minecraft would sell just as much during that time, which is ridiculous from a business POV.

What buying Mojang meant is that Microsoft will prevent further Minecraft iterations from ever appearing in anything other than Windows/XBox platforms. They bought mind-share and market presence.

Buying Mojang meant:
- getting profit right away.
- the tax advantages that Dave pointed out
- the potential of even more profit if they manage to grow the business. Not a guarantee, but not an outrageous idea either. A company always needs to assume that an investment will eventually grow in the long term. It makes your 20x argument invalid. (Similar arguments could be made about the $1B Instagram buy by Facebook, or Google buying YouTube.)
- acquiring a channel to millions of kids. Even if they don't have a way to monetize that now, (except the $120M year of course), it's just a matter of time until they come up with something.

If you do shortsighted Totz research and look at just the present, then $120M may be a tad high.

If you are a business person, have a vision and are willing to take chances, $2.5B was a bargain.

 

[Davros]

Does AMD generate profits?

I have a question :
looking at AMD's earnings they lost $181million in q2 2015 where does that $181 million come from, their own money or do they now owe someone $181million if so who ?
Also they lost $180 million in q1 2015 does the $181 in q2 include that meaning in q2 they lost $1 million or is it a total loss of $361 million for the year so far
Imagine I owned 1% of amd in shares Am I liable for !% of AMD's debt ?

 

[Grall]

Also they lost $180 million in q1 2015 does the $181 in q2 include that meaning in q2 they lost $1 million or is it a total loss of $361 million for the year so far

Losses are cumulative, meaning if they lost 181 million that quarter, then that is money lost in that quarter; on top of any other, previous losses.

And no, debt lies with the company, not the people owning said company. Or well, owners might be liable in some forms of companies/corporations, that would vary according to business law of that nation. In Sweden, if you form a stock company, you're not liable for anything further than the SKR100k needed to initially form the company.

...Of course, if you embezzle or otherwise cause the company's demise due to incompetence or such, you may become liable to the (other) stock owners. But that's like, criminal law, yes?

 

[Ryan Smith]

I have a question :
looking at AMD's earnings they lost $181million in q2 2015 where does that $181 million come from, their own money or do they now owe someone $181million if so who ?

With AMD it's usually a mix of actual monetary losses, and write-offs of assets and goodwill. So AMD did in fact spend more money than they made in Q2, but they did not spend $181M more than they made. However the losses to shareholders are tangible because the company now has fewer assets, making the company worth less.

Imagine I owned 1% of amd in shares Am I liable for !% of AMD's debt ?

No. That's not how corporations work.

 

[Florin]

I have a question :
looking at AMD's earnings they lost $181million in q2 2015 where does that $181 million come from, their own money or do they now owe someone $181million if so who ?
Also they lost $180 million in q1 2015 does the $181 in q2 include that meaning in q2 they lost $1 million or is it a total loss of $361 million for the year so far
Imagine I owned 1% of amd in shares Am I liable for !% of AMD's debt ?

Like most companies AMD already owes creditors large sums of money in the shape of IOUs or bonds. Nothing wrong with that as long as a company can pay the interest and is considered creditworthy enough to get additional loans at reasonable rates.

Another way for a company to get money is to attract outside investors by selling shares. Owning equity in a company in the form of shares does not make you liable for losses. On the other hand, many profitable companies reward investors by sharing profits in the form of dividends.

AMD's revenues minus costs added up to a net loss of $180 million in Q1 and another $181 million in Q2. In fact 9 of the preceding 12 quarters were not profitable. So the company must either raise revenues and/or cut costs, renew or get additional loans, or issue new shares. Raising revenues is hard in the competitive field. Cutting costs is hurting the company's ability to compete. Loans are considered riskier if there are no assets in the company to offset them, so that gets pricier. Shares don't accumulate in value if the company doesn't grow or pay dividends, so there's less appetite for that. At some point it just stops working out.

 

[Florin]

Everyone is talking about a buyout for some reason (well, that's what the rumor says, so I guess that's a reason) but I think it might make a lot of sense for Microsoft to invest a few hundred million dollars into AMD, not necessarily to gain control of them or cheaper access to their products, but simply to keep them alive, and to keep x86 competition healthy. After all, the PC remains Microsoft's bread and butter.

I don't think 'keep healthy' applies.

 

[Razor1]

I have a question :
looking at AMD's earnings they lost $181million in q2 2015 where does that $181 million come from, their own money or do they now owe someone $181million if so who ?
Also they lost $180 million in q1 2015 does the $181 in q2 include that meaning in q2 they lost $1 million or is it a total loss of $361 million for the year so far
Imagine I owned 1% of amd in shares Am I liable for !% of AMD's debt ?

Corporations are entities by themselves, share holders aren't responsible for a corporation's debt this is the protection incorporation gives its owners, now if sued yes the suing company can go after major share holders of a company that is different.

 

[Razor1]

Like most companies AMD already owes creditors large sums of money in the shape of IOUs or bonds. Nothing wrong with that as long as a company can pay the interest and is considered creditworthy enough to get additional loans at reasonable rates.

Another way for a company to get money is to attract outside investors by selling shares. Owning equity in a company in the form of shares does not make you liable for losses. On the other hand, many profitable companies reward investors by sharing profits in the form of dividends.

AMD's revenues minus costs added up to a net loss of $180 million in Q1 and another $181 million in Q2. In fact 9 of the preceding 12 quarters were not profitable. So the company must either raise revenues and/or cut costs, renew or get additional loans, or issue new shares. Raising revenues is hard in the competitive field. Cutting costs is hurting the company's ability to compete. Loans are considered riskier if there are no assets in the company to offset them, so that gets pricier. Shares don't accumulate in value if the company doesn't grow or pay dividends, so there's less appetite for that. At some point it just stops working out.

Right and AMD is at a point right now, their shares aren't worth much, and because of the upside down balance sheets they have had for an extended period of time with the amount of debt they have, they will now most likely have to provide collateral (actual parts of the company) for taking out more loans

 

[Moloch]

http://hexus.net/tech/news/cpu/86585-legendary-cpu-architect-jim-keller-leaves-amd/