Advanced Micro Devices Inc (AMD)

[facsnotfiction]

Petz
1st bond issue: 43 shares per $1000 in bonds, $23 and change per share as follows (Dilution 21,500,000 shares);
The Debentures will be redeemable at the company's option beginning on February 5, 2005, provided that the company may not redeem the Debentures prior to February 5, 2006 unless the last reported sale price of the company's common stock is at least 130% of the then effective conversion price for at least 20 trading days within a period of 30 consecutive trading days ending within five trading days of the date of the redemption notice.
2nd bond issue: 7.37 exercise price, Not redeemable till 2007,
dilution about 68,000,000 shares.

The first issue will probably knock the price down 5 to 10%. the second one in my opinion should not be converted, rather pay the interest and buy them back at the end of the term.

The rules on the first convertible mean closes above $30 on 20 of 30 days ending within 5 days of the redemption notice. so If the stock is trading above $30 in January of 2005, which I consider to be likely based on current market info, I expect AMD to redeem those Convertibles on or shortly after Feb 5, 2005. My exit strategy was keying on the stock peaking around Christmas of 2004 with businesses upgrading over the next 12 to 18 months. My guess is December 04 or January 05 may be the time to cash out. I figure by that time demand will probably be backing off on Flash and peaking on CPU's. After all semi's are cyclical, and the industry is mature.