Wednesday, November 14, 2012

Advanced Micro Devices, Inc. (NYSE:AMD) says not considering sale, AK Steel Holding (NYSE:AKS) stock under pressure

Shares of chipmaker Advanced Micro Devices, Inc.(NYSE:AMD), which rose on reports that the company was considering a sale, fell on its statement of denial.

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Reuters had published a report that the manufacturer had appointed JP Morgan Chase and Co for exploring various options, including sale.

But in a statement, the company said, "AMD is not actively pursuing a sale of the company or significant assets at this time.""AMD's board and management believe that the strategy the company is currently pursuing to drive long-term growth by leveraging AMD's highly differentiated technology assets is the right approach to enhance shareholder value."

After initial reports, the stock rose as high as 18 percent, to $2.35, up 36 cents.  After clarification from the company, it fell 5 percent to close at $2.09.  In after hours trade, it fell a further 2.9 per cent or 6 cents to $2.03.

Another company, this one in the steel space, is expecting a poor fourth quarter.  A higher than expected loss outlook and a planned stock sale dragged down the shares of AK steel Holdings Co.

It expects a net loss between 67 cents and 72 cents a share, of which 33 cents would be for a $35 million charge on its deferred tax assets.  Also, the quarterly results will be affected by prices which are likely to fall 5 percent, despite higher quantities being shipped.  The Street was expecting a loss of 22 cents a share.

Further, AK is selling 25 million shares and will use the proceeds for debt repayment and other purposes.  This will result in a higher stock float and might affect share price.  The stock has now a ‘near junk’ status after Moody’s cut the rating of the stock.
The steel stock fell 96 cents and closed at $4.53.

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