The AMD Execution Thread [2007 - 2017]

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And due to the last amendment to the wafer supply agreement they still have the option to buy another 75 million shares at a fixed price of 5.98 USD per share at any point in time prior to February 2020. A key qualifier being that this cannot bring their total owned shares between Mubadala and it subsidiaries to more than 19.99 percent.

So this is a good play by them (Mubadala and holding) in many ways.
  1. They just made ~13.62 USD per share, selling enough to recover their initial investment (not including inflation).
  2. They lowered their total stock holding in the company.
  3. Which ensures that in the future they should have no problems exercising the option to buy 75 million shares of AMD at 5.98 USD per share through their subsidiary West Coast Hitech, LLC. If they then decide to just turn it around for cash, it won't be affected by the price drop of the 45 million shares they just sold.
So looking at it. Mubalala and holdings are making out quite well by that amended wafer agreement. If Vega is well received and they continue to execute well or at least competently on Zen share prices could rise still more. That'd be a tremendously large sum of cash for just amending their contract which was already favorable for them.

Regards,
SB
 
Silent_Buddha said:
Which ensures that in the future they should have no problems exercising the option to buy 75 million shares of AMD at 5.98 USD per share through their subsidiary West Coast Hitech, LLC. If they then decide to just turn it around for cash, it won't be affected by the price drop of the 45 million shares they just sold.
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Considering the cash raised they may be exercising that option. $450m plus charges at those terms.
 
Anarchist4000 said:
Considering the cash raised they may be exercising that option. $450m plus charges at those terms.
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If I were them (I'm not) I'd hold off on taking out that option for 75 million shares unless they don't believe that AMD share prices will rise again between now and 2020. The only way it makes sense to buy it now would be if they intend to immediately turn around and sell those shares. Otherwise, it's better to hold off and accrue interest on the ~450 million USD. As well, due to inflation, 450 million USD at X point the future is worth less than 450 million USD now. IE - it'd be cheaper to buy it in the future.

Regards,
SB
 
Silent_Buddha said:
If I were them (I'm not) I'd hold off on taking out that option for 75 million shares unless they don't believe that AMD share prices will rise again between now and 2020.
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At that scale it could take years just to unload that many shares. They tanked it nearly 15% with their current move. If AMD has a strong run with Zen/Vega, they could stabilize the share price, unloading while demand is strong. Might be another large firm wanting in as well. With their terms of $6 a share, they should outperform interest easily.
 
Anarchist4000 said:
At that scale it could take years just to unload that many shares. They tanked it nearly 15% with their current move. If AMD has a strong run with Zen/Vega, they could stabilize the share price, unloading while demand is strong. Might be another large firm wanting in as well. With their terms of $6 a share, they should outperform interest easily.
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Sure, but let's say that it just sits there for 1 year. At 1% non-compounded interest (very low, and actual investment would be compounded at least quarterly) that's 4.5 million USD. Likewise if inflation were at 1%, that means you just lost 4.5 million USD by exercising the full option now, rather than later.

When you don't have a fixed price, it makes sense to buy it when it is most advantageous. IE - you believe it is close enough to bottoming out that it's likely to start going up from there. With this deal, the later you buy the more advantageous your position as the purchase value of the stock continues to decline over time. Of course if you aren't simultaneously doing something with that money (earning interest, investing into operations, something) then that'd be a moot point.

It's much better to wait until you plan to sell some amount of those shares or the warrant is close to expiring. And even then, you'd be better off selling your existing stock holdings unless it would drop you below the required amount to remain on the board of directors.

I could see it making sense as well if AMD provided dividends to owners of stock, but AFAIK, they don't do that.

Regards,
SB
 
Please, can we stop the financial analysis or start a different thread for it? Finance stuff gives me a headache as well as a heartache. :(
 
Markets or decisions about what to do on markets can be analysed with cold headed math. Nice greek letters, compound interests, leathers seats, elegant people around whiteboards, incredibly well kempt offices and then.. What actually happens on the market looks like a million monkeys with typewriters, mixed with endless cargo cult.
 
digitalwanderer said:
I've honestly lost track at this point. If it is, my apologies. :oops:
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The thread title gives it away.

"Execution" threads are about the whole performance of a company, not just financial. Things like delivering products on time, any slips or cancellations, resources to execute, teams in play, decision making by key employees and boards, plus all of the financial and market performance off the back of whether the company executed well given all of that (or not).

In the case of "or not", we get the "gloom" thread titles coming in to play.
 
Rys said:
[...] teams in play[...]
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Coming soon Rys Sommerfeldt will join AMD's RTG team to work on graphics related topics for games:
https://twitter.com/ryszu/status/839104168073781250

Any further details on that matter Rys? :D
Will your current knowledge and workflow directly map to your job position at AMD or is it probably a mix between new challenges and leveraging your existing expertise?
 
Locuza said:
Any further details on that matter Rys? :D
Will your current knowledge and workflow directly map to your job position at AMD or is it probably a mix between new challenges and leveraging your existing expertise?
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It's a mix. My work for PowerVR for the last 7 years has been overwhelmingly focused on competitive and performance analysis, and while there's plenty of the technical aspect of that kind of work that will map to what RTG are hiring me to do (especially the performance analysis side, because my team work on tooling and optimisation for Radeon), there's a lot of new stuff for me to learn and take on as well.

That's the appeal really. If it was purely a like-for-like role doing exactly the same work, I probably wouldn't have switched. PowerVR have the best operational competitive analysis team in graphics today, so the opportunity to work on new things was a big part of saying yes.
 
Rys said:
It's a mix. My work for PowerVR for the last 7 years has been overwhelmingly focused on competitive and performance analysis, and while there's plenty of the technical aspect of that kind of work that will map to what RTG are hiring me to do (especially the performance analysis side, because my team work on tooling and optimisation for Radeon), there's a lot of new stuff for me to learn and take on as well.

That's the appeal really. If it was purely a like-for-like role doing exactly the same work, I probably wouldn't have switched. PowerVR have the best operational competitive analysis team in graphics today, so the opportunity to work on new things was a big part of saying yes.
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Contrary to what some might believe I'm not one bit sad hearing your news. I'm actually more than glad and proud as I can be to know you for all those years :) All my best!
 
Rys said:
It's a mix. My work for PowerVR for the last 7 years has been overwhelmingly focused on competitive and performance analysis, and while there's plenty of the technical aspect of that kind of work that will map to what RTG are hiring me to do (especially the performance analysis side, because my team work on tooling and optimisation for Radeon), there's a lot of new stuff for me to learn and take on as well.

That's the appeal really. If it was purely a like-for-like role doing exactly the same work, I probably wouldn't have switched. PowerVR have the best operational competitive analysis team in graphics today, so the opportunity to work on new things was a big part of saying yes.
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So, the next gen GPU will get the true RysUnit?

For younger people:
https://www.beyond3d.com/content/reviews/16/8
The fifth fatter unit (let's egotistically call it the RysUnit, since it shares my proportions compared to normal people, and I can be 'special' too) can't do dp ops, but is capable of integer division, multiply and bit shifting, and it also takes care of transcendental 'special' functions (like sin, cos, log, pow, exp, rcp, etc), at a rate of one retired instruction per clock (for most specials at least).
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http://seekingalpha.com/article/405...n3m:baaf947f0671c31885640f3cb6ac973c&uprof=45

Is the article correct? No. Mubadala is not dumping shares on the open market (as is implied per the comments above). What is overlooked is the fact that Mubadala sold 45 million of its 149.9 million shares to Goldman Sachs (GS) in a block trade with a 60 day lock up period (see amendment #7, Item #4).

The great news is that Goldman Sachs is buying $613 million of AMD... but why is Mubadala selling? Investors are confused over this point. We will shed light on it; explore the details -- and explain what it really means for AMD investors.
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...

Numbers Make My Head Hurt, Just Tell Me What Is Going On

AMD could potentially get paid $5.98 x 50 million shares or 299 million dollars in a few months per Mubadala. That is a lot of capital that can be used to funnel into R&D, acquisitions, or reduce debt.

Mubadala goes from owning 15.6% of AMD to owning 15.3% due to the share count changes, but simultaneously frees a considerable amount of capital (613 million sold to GS but 299 million paid to AMD). Also, they keep 25 million shares in the form of what remains on the warrant (but with less risk).

Goldman Sachs purchased 613.3 million of AMD. Goldman obviously believes AMD is undervalued -- and hopes to resell AMD shares at a higher future price. The lockup period for the acquired block trade shares will end early May with AMDs' server CPU "Naples" being released after.
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