"Usually, deals generate buzz and you hear about things going on," says Morreale. "This one has been relatively quiet."
On the other hand, Spansion recently upped the number of shares it intends to sell to the public, a sign of demand for the stock, according to John Fitzgibbon, an analyst with IPODesktop.
Yep, something seems fishy. Here is one way to reconcile the conflicting signals.
AMD has stated it wants to receive about 660 million from the spinoff. That comes to 39.2 million shares at $16-$18. After shopping Spansion around the bankers tell AMD that the street is willing to pay about $14.70. AMD wants to target the 660 million sum, so they offer another 5.8 million shares, for a total of 45 million, in anticipation that the street will snap them up. Normally the extra shares are for over-alottment but maybe not this time. If all goes well, AMD is rid of Spansion and they receive what they want for it. Anything more is icing on the cake.
One other key point. The 5.8 million extra share offer occured before(I think) Spansion admitted that they are having problems this quarter. Meaning that the offering price may be even lower. If all this is true, then there is the remote posibility that AMD will pull the IPO. Very bad, if true and I doubt this. But I think the $14.70 price target is important. Anything below this and the street will not like it. Of course many will counter that getting rid of Spansion at any price is a positive. We shall see how it all works out.
IMHO
