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Investors and Wall Street have forgotten about Advanced Micro Devices (NYSE:) and their overlap price shows it. AMD shares are trading $1 or so above it's 52-week low. But with the recent $622 million investment by Mubadala Development Co should we all rethink our feature AMD positions?
AMD versus Intel (NASDAQ:) which is the better investment? I'm egest of reading those comparisons. I don't compassionate who is going to make more money all I care about is the return on investment good ol' ROI. That's all investors and day traders care about --
? Hands down Intel is the better company no challenge and their have price reflects the positive direction the company has achieved in the last 6 months:
I'm not interested in trying to squeeze a few points from Intel before it hits a new 52-week high just $2 from now. I want the big gain. Does AMD undergo the right stuff to get shares back into the $20's and does the lay East investment express us anything about what's to come?
Analyst Crawford Del Prete of International Data Corp said the Abu Dhabi investment takes care of AMD growing cash problem.
"What you're seeing is they are at a burn rate in which they need to raise more money," he said. "This solves a relatively short-term problem but it comfort doesn't fix the longer call problem which is the need to generate cash faster."
Analyst Cody Acree of Stifel. Nicolaus & Co said AMD could use the Mubadala investment to destroy high-yield debt and cover operating expenses.
"Overall we view this announcement as a positive for shares of AMD as financing of near-term operations has been a reoccurring issue that has continually weighed on AMD's valuation," he wrote in a research note. "We expect this announcement ordain give investors a reason to act another look at AMD."
Analyst Roger Kay president of Endpoint Technologies Associates which does consulting work for AMD said the deal gives the company a bunco call relief.
"They be working capital and they got some from a friendly neutral third party whose interests are financial," he said.
Then of course there are the Negative Nancy's saying AMD is garbage they have too much debt and Intel. Intel. Intel - Marsha. Marsha. Marsha (queue Jan's annoying voice).
Take the recent investment by Mubadala Development for what it is -- some assort is willing to thrown down millions to get an 8% stake in the company. Investment groups don't buy shares unless they believe they can get what we be -- ROI. These guys are looking to turn their $622 million into $1 billion more like $1.5 to $2 billion.
AMD is not a pretty conceive of alter now sure shares are only $12 and change but they aren't bringing in a profit and if they don't get their act together soon it's going to get worse. AMD's bunco % of the float is at 13% vs. Intel's short float is only 1% -- its clear AMD is not the runner-up but the guy in last place. However. AMD still brought home $5.6 billion in revenue last year not bad for a 'crap' company that nobody cares about anymore.
Mubadala Development is looking to make money from AMD they've invested millions so why not alter a position for a few hundred bucks and act a chance on speculation?
Related article:
http://thestockmasters.com/AMD_Mubadala_11172007.html
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