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Intel could give away three for every one sold and
IPF MPU ASP would probably still be an order of magnitude
higher than AMD's MPU ASP.
Ah, now there's a statement! A niche server processor has a higher ASP than AMD's *entire* line.
140W should enable a QC 2.4GHz part on 90nm, to say nothing of 65nm.
How will Woodcrest compare? :)
Xeon was always positioned as a premium brand. When you are selling crap, and offering rebates under that brand name, it tends to damage the 'premium' aura just a tad. :)
When Woodcrest finally launches, it'll be up against DC 3GHz Optis, and QC Optis whenever AMD wants them. Somehow, I doubt AMD is concerned. :)
Ah, the French! Simulating things with an unreleased part. I guess that really is a simulation.
Looks like Montecito will underperform Opteron and Woodcrest when (if?) it finally ships.
Exactly. And, given its specs, there's good reason nobody in his right mind wants one. Unless he particularly likes an underperforming blast furnace.
Poxville ain't selling. Xeon brand damage in action.
Where's chipguy? Montecito just blew up again.
Best hope is now 1.6GHz / small cache / No Foxton / late May, but late May seems likely to slip.
http://www.theinquirer.net/?article=29497
That is strange-- maybe they know they really need to stretch to hold server marketshare, but for desktop, they need to be able to manufacture at reasonable yields? But why are desktop parts on 1066FSB, server on 1333FSB? Is it only 'Conroe EE' that will have 1333FSB and a faster bin?
Merom tops out at 2.33GHz, in the 3rd article.
Not much for AMD to worry about here.
Probably pure FUD, given that the HT 2.0 standard supports 1.2 and 1.4GHz, but not 1.33GHz. The main purpose for the boost would be for the cHT links between CPUs in a multiprocessor server, so his "southbridge support" comment is unlikely, as well.
Maybe now? No.
But then he wouldn´t have the money he got from the transaction in his bank account, now, and wouldn´t be able to reap the potential rewards of the strategy that he has chosen for himself with his his direct share ownership position, based on his expectations and personal plans.
Translation: He reduced his investment in AMD.
I'm glad you see that.
To restate matters, I see 2 general errors made regarding insider transactions, not necessarily all by you:
(1) A focus on individual transactions, without regard to the context of the individual's ongoing grant history and other sales. Example: "OMG! Hector sold 250K shares! How bearish!" -- well, not if Hector receives 1000K shares per year, and typically sells only 250K per year."
(2) A focus on shares held, to the exclusion of other investment instruments, be they in-the-money options, debt, whatever. Example: "Wow! When he exercised & sold, he didn't sell all of them, so his share holdings increased! How bullish!" -- well, no, not necessarily. His options were also an investment. One needs to plot the reward vs. stock price under both scenarios (and include tax consequences here by all means) to determine whether that transaction IN ISOLATION was bullish or bearish, and then expand context to (1) for a proper evaluation of his overall sentiment.
I fail to see how any informed investor could disagree with either of these points.
Sure it is, Keith.
$2M invested in $8-strike calls.
$1.2M invested in AMD stock.
You think the latter is a more aggressive position. I'm glad you're not managing MY investments.
So taking the shares instead of selling means he expects it to be worth his while.
That would be an argument, except for the fact that there's another option: do nothing. Which in this case, even factoring in taxes, was the more aggressive position.
How is this not clear? By NOT undertaking this transaction, he stood to gain MORE money from future AMD stock price appreciation, even factoring in taxes.
So the transaction, is not bullish, but bearish, in isolation.
If you want to say it is more bullish THAN X, where X = selling even more (or all) shares, well obviously.
But it is bearish compared to doing nothing.
Of course, as I've said all along, one needs to consider additional grants he receives over time, and factor in an allowance for rational diversification, but Keith wanted to focus on this one transaction.
Options are not positions
Options are an investment vehicle, just as much as stock is. I can't believe you are arguing differently.
So yes, indeed he does speculate with that particular position on a rising stockprice. What a breakthrough! And that is exactly the position I referred to in my very first post on the subject.
LOL! Yeah, okay, Keith. I think we're done here.
Only inasmuch as someone who sells 99% of their position is also "speculating" with the remaining 1% "on a rising stockprice".
Can you really not see the point, or is it that you can't stand being corrected, and are looking for any kind of technical 'out' you can find?
So far you've tried:
- tax issues (didn't work-- but by far the best defense: with different numbers (fewer shares sold after exercise) this might have been the case.)
- look at only one side of a transaction (irrational)
and my favorite:
- "I only said it *seemed* bullish *on the surface*"
I can't think of anything more I could say to convince you, and as I say, I think that you actually are convinced, but won't say so, which makes further discussion of this matter of little value.
Let's talk about something else.
Keith, there is room in between investing every dollar you own (and then some) in a stock, and selling all your holdings in it.
Palmer's action (in isolation) suggests he is LESS bullish than he was.
To use another analogy, it is as if he lowered his 12 month target from $75 to $50. He didn't lower it to $30, in which case he should've sold all shares, but he pulled it back.
Again, just look at that position for now.
Looking at just one side of a transaction is meaningless. You have to compare it against the position he held before the transaction. To see this: Suppose Palmer held 100M shares of AMD, and sold 99M last week. You wouldn't say, "Look at only the 1M shares he chose to hold-- if he was bearish, wouldn't he have sold those 1M, too?" It's clearly ridiculous.
EDIT:If they were ISOs, then no, he doesn't. (BTW, see edit) And make your point in 1 post please. This is getting tedious, and using up my posts for today.
Even if they were not ISOs, the tax issue will not make 31000 shares taxed at LTG from $40 --> N, and ord inc from $8-->$40, outperform 69000 options taxed at ord inc from $8-->N. The difference in tax rates is not large enough to overcome the difference in underlying shares.
EDIT: Without checking your numbers, that sounds about right. Do also note that those 69110 options had a value of roughly $2.2M on the day he sold the 36000 shares. That was the size of this part of his investment in AMD prior to the transaction, in the form of options with a strike of about $8.50 on average. (even less than $10, then.) At today's stock prices, these options are 80% the way to being "shares" in terms of the way they behave.
So, "keeping it simple":
Before transaction:
69110 options with a value of $2,200,000.
After transaction:
-$564,000 in exercise costs.
$1,435,000 in proceeds from sale.
$1,320,000 in 33110 shares.
Happily, the numbers balance.
So the transaction resulted in his AMD investment going from 2.2M in options ---> 1.32M in stock + 900K in cash.
A reduction in AMD position.
"Optimum servers" LOL! Not bad...
See the edit, but yes: of course they were part of his compensation. Doesn't particularly matter. Gift, compensation, won in a lottery.
EDITED: And I also understand what it means if an employee decides to build a direct ownership position in a stock, using options.
This is the part I think you're not understanding correctly.
It doesn't mean anything, absent the details of how his ENTIRE investment ("bet") in the company changed, stock AND option holdings considered.
An employee sitting on in-the-money exercisable options already has an effective ownership position. And it is a more aggressive one than one achieved by taking the NET proceeds after exercise (so subtract the strike) and buying stock with it. And in Palmer's case, he sold off more than that, leaving less for the stock position he built later.
Doing nothing would've been been more bullish than what he did.
---------------------------
One last analogy, since you like them so much:
Employee is given stock when the company trades for $2/sh.
Later when the stock is trading at $100/sh, he sells his shares, takes 50% of the proceeds, and re-invests in company stock, purchased in his Fidelity account.
You would say, "And I also understand what it means if an employee decides to build a direct ownership position in a stock in his Fidelity account, using proceeds from stock he was awarded while an employee."
Don't you see how meaningless that is?
It is no different (in any way that really matters) than your "looking at stock holdings in isolation is meaningful" position.
Keith, I'm beginning to think you simply don't understand options. I can't think of another explanation for why you termed the Palmer transaction 'bullish', when it was not. It's as simple as that.
Anyone can go back to your initial post, and read through our discussion:
http://www.investorshub.com/boards/read_msg.asp?message_id=9481379
You misstated the gist of Palmer's transaction again. Hence my reply.
You wrote, "Like Palmer, this guy obviously speculates on a rising share price. That´s what acquiring and holding shares is about."
But Palmer just REDUCED his bet on AMD, unlike "this guy".
No, the Palmer guy reduced his exposure to AMD and its share price. He had $2M invested in his $10-strike options, and that position was converted into $1.2M in AMD shares.
$2M in $10-strike AMD options ---> $1.2M in AMD shares.
A reduction in position.
Anyone remotely familiar with options would understand-- this isn't rocket science.
(Of course, once again, Palmer's reduction in exposure must be viewed in the context of any increase in exposure he receives over time by virtue of receiving part of his compensation in options.)
Lower risk, going forward, in general.
But then, this situation is different (so far) than the last one Keith mentioned.
In this case, he's committed additional cash, and exercised options, but not sold. The previous guy went from:
~$2M in $10 strike calls to ~$1.2M in shares of stock, which, in itself was "bearish", i.e. lowering his bet.
As I said, though, you need to look at inflow (purchases and awards) over time, and compare it to "outflow" transactions, we see from time to time.
Getting excited about "direct holdings" (i.e. shares) and ignoring in-the-money option positions is not rational.
And now Opteron unit share is up to 90% in Q4, from 80% in Q3. Not surprising, really, given Intel's total lack of competitive server parts.
Regardless, seems like SGI earnings sent that stock back into the toilet:
Or this: Five Investing Mistakes You Should Avoid
http://www.thestreet.com/_yahoo/pom/pombos/10265908.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA
Mistake 3: Being afraid to change directions Investors should not fear change. In fact, change can save you tons of money and make investing much more enjoyable.
Why?
You are investing in the stock market, which is a mechanism that allows for price changes and sentiment shifts on a daily, if not hourly basis. We aren't recommending you become a daytrader or market-timer, but we do believe at least being aware of the constant change in the market or economy will make you a better, more profitable investor.
For instance, if you are long Intel (INTC:Nasdaq - commentary - research - Cramer's Take) as a play on strong demand from computer and server makers but your research begins to show that Advanced Micro Devices (AMD:NYSE - commentary - research - Cramer's Take) is introducing better products at a faster clip for a lower cost, the sensible move is to move your money from Intel to AMD.
This example, which is taken directly from the second half of 2005, was a classic example of some investors' refusal to change their minds. The result was too many investors betting in Intel. When the company disappointed investors with its fourth-quarter EPS results and AMD topped forecasts, there was massive selling of Intel's shares for losses and late-to-the party buying action in AMD.
Don't be afraid to throw all of your old homework out of the window and adopt a new strategy when current events dictate such action.
------------------------------
Well, that was Anandtech, not AMD. :) All I know is that some previously reliable insiders (folks who get samples, post photos early, etc.) on another forum said FX-65, 2.8GHz, April.
What about the horse called 'Bankruptcy'?
Not all that surprising, really, as you say, given Intel's non-competitive server products.
Did AMD say it was the last speed bump for S939?
If they stuck to that formula, looks like a pricing waterfall-- perfect time to introduce a new top-speed part, no?
It'll probably be a Fab36 part, built on what's sounding more like a 90nm-65nm hybrid initial process ( http://www.investorshub.com/boards/read_msg.asp?message_id=9370643 ) if the Fabtech article is correct.
I think it is due in April. If that means 939, I guess the answer is yes.
There will probably be some overlap when M2 launches, e.g.
FX-65 for 939, FX-6_ (6? 7?) for M2.
FX-65 2.8GHz DC is due in April. Presler probably needs price cuts to sell, given that it's the last of the NetBurst line.
From the article: previews at CeBIT, next month, launch in Q2, many of them will be at Computex in June...
Don't overlook its huge mountain of debt, which dwarfs its market cap & cash (kinda like GM, only not that extreme):
Market cap: ~90M
Cash: ~ 80M
Debt ~270M
Speaking of the SOS:
It probably has much more to do with ongoing earnings revisions upwards, and AMD's improving balance sheet. How many Dell rumors can move the stock before everyone has decided they are "crying wolf". I think we've passed that point.