Transforming Network Infrastructure Industry News

TMCNet:  Mubadala Reinvests in AMD to Maintain Liquidity

[December 04, 2012]

Mubadala Reinvests in AMD to Maintain Liquidity

(Benzinga Lightning Feed Via Acquire Media NewsEdge) Stock in Advanced Micro Devices, Inc. (NYSE: AMD), the second-largest maker of personal computer processors, traded higher Monday and today after its largest shareholder took steps to avert a potential cash shortfall.

Mubadala Development Company, the investment arm of the government of Abu Dhabi, increased its share of AMD by 19 percent and took an extra board seat last month, in a move that positions the company to bail out AMD should their cash reserves dip too low.

Mubadala became AMD's largest shareholder back in 2008, and bought AMD's manufacturing facilities in order to create GlobalFoundries, a made-to-order semiconductor producer that now has AMD as one of its largest customers.

AMD shares have lost about 56 percent so far this year, and concerns about the company's volatility continue amidst the recent gains facilitated in part by Mubadala. On Monday, AMD stock closed at $2.36 per share, the company's highest since October 18th, but analysts remain cautious.

In October, AMD forecasted fourth quarter sales numbers below analysts' predictions, and cited weak demand in all of their product lines as the driving force behind cutting 15 percent of their staff. Revenue projections put the company on track to experience its fourth consecutive quarterly sales decline, which has led analysts to believe that AMD's cash reserves will fail at some point in the near future.

To boost cash reserves, AMD announced last week that it will sell facilities in Austin, Texas in an effort to raise between $150 million to $200 million. The company is expected to close the deal in the first quarter. After selling the space, AMD plans to lease it back.

Mubadala now has a 15 percent stake in AMD, and unexercised warrants for additional stock purchases bring its total holdings to about 19 percent. Its latest re-investment in the company has helped ease concerns about AMD's liquidity, and at the time of this writing AMD's stock had risen an additional five percent since yesterday's strong close.

(c) 2012 Benzinga does not provide investment advice. All rights reserved.

[ Back To Transforming Network Infrastructure's Homepage ]

Featured Blog Entries

The History of Fiber in Data Centers, Part II

As I stated at the close of "The History of Data Centers, Part I," Fiber Mountain™ believes data centers must evolve from hub and spoke architecture—in which traffic is aggregated and delivered to a central hub—to a design that includes many direct connections.

Three Things Your Boss Wants—No, Needs—To Know About Glass Core

Fiber Mountain™ CEO and Founder— plus my longtime friend—M.H. Raza does a terrific job on this blog of explaining how our Glass Core™ architecture transforms the way data centers build their network infrastructure.

The History of Fiber in Data Centers, Part I: Past and Present

Fiber Mountain, as our company name suggests, believes fiber cabling must play a central role in helping data centers scale affordably as bandwidth needs continue to grow. Before I go further down the path to the future, however, I want to back up and provide a high-level history of fiber in the data center.

Four Reasons to Make the Leap to SDN in Your Data Center

I'm always fascinated by what causes a business trend to emerge, grow and sometimes expand to actually redefining the industry as a whole. Having spent years in the technology field, I've found the networking sector particularly exciting in this regard because true innovation can and does transform entire segments of our industry. Revolutionary processes and technologies make past deployments and best practices look laughable in light of recent innovations.

Reflections From the Fiber Mountain Launch

Over the past weeks and months, the Fiber Mountain team has worked hard to prepare for our company launch at this year's Interop New York. In this post, I want to share our thoughts from the days leading up to the October 1st unveiling and about the event itself at the Jacob Javits Center in Manhattan.

Featured Event

ITEXPO Miami 2015

January 27 - 30, 2015
Miami Beach Convention Center
Miami, Florida

9:30 - Wed. January 28
M. H. Raza
Fiber Mountain™
Founder & CEO

Video Showcase