Sales rose 45 percent last quarter, yet free cash flow fell 64 percent as inventory, receivables and supply prepayments absorbed $6 billion. Two customers hold penny warrants on 320 million shares, worth $155 billion at the 3 November close.
Excellent analysis that goes beyond what has been said (a lot, perhaps too much) about AMD in recent days. Looking at growth without evaluating its financial sustainability over the investment time horizon can be misleading. And giving others options on your stock look doesn’t seems so.
Thanks. The odd thing about the warrants is that they cost the most when things go well. Full vesting needs 12 gigawatts of orders and a $600 share price, and at the 3 November close the 320 million shares were already worth $155bn. That's a fair trade if the revenue comes in. But if you're valuing AMD on those contracts, use 1.96bn shares rather than 1.64bn.
Excellent analysis that goes beyond what has been said (a lot, perhaps too much) about AMD in recent days. Looking at growth without evaluating its financial sustainability over the investment time horizon can be misleading. And giving others options on your stock look doesn’t seems so.
Thanks. The odd thing about the warrants is that they cost the most when things go well. Full vesting needs 12 gigawatts of orders and a $600 share price, and at the 3 November close the 320 million shares were already worth $155bn. That's a fair trade if the revenue comes in. But if you're valuing AMD on those contracts, use 1.96bn shares rather than 1.64bn.