Replies to post #68032 on Advanced Micro Devices Inc (AMD)

[KeithDust2000]

chipguy, The STM alliance for NOR was reasonably a turd in AMD's punchbowl but I think putting the Micron venture in the same category is a bit of a stretch.

AMD added both the Micron and the STM deal to its S1 as potential risk factors/competition. Also the press mentioned that many times.

Some specific portion of that shortfall must effectively come straight out of AMD's pocket. It is what, 40%? 60%?

AMD had 60% of Spansion, but I have no idea how this is accounted
for. I thought you knew, that´s why I asked.

Also, I wonder what AMD/Spansion really expected knowing the current market environment and Spansion´s lack of profitability.

[HailMary]

Some specific portion of that shortfall must effectively come straight out of AMD's pocket. It is what, 40%? 60%?

No, that is not how it works. SPSN gets all the cash from the IPO. A portion of AMD's equity (assets-liabilities) now go to SPSN and they account for them. AMD looses some equity here, but they gain equity by getting shares of SPSN. And the equity value of AMD shares of SPSN are based on the market price, which I bet is going to be higher than $12 by year end. Also SPSN owes AMD some money for loans, and that gets paid back.

My guess is AMD just gained a good amount in equity (but lost overall in value of assets). Yes that equity could be higher, but the IPO price is not important. The market price is.