The economic downturn couple with a general shift in
customer preferences towards mobile devices has hit the computer chip-making
industry hard. Advanced Micro Devices, Inc.(NYSE:AMD) is exploring several
options including strategic stake sale in order to survive the tough times.
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According to an exclusive report by Reuters, the
company has hired JPMorgan Chase & Co to assist it in sifting through the
options available to it and arrive at the best possible solution.
The report said, citing sources, that for AMD an
outright sale was not a priority and it as looking at other alternatives such
as a sale of its patents portfolio.
AMD said in an email to Reuters, "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. AMD is not actively pursuing a
sale of the company or significant assets at this time."
Shares of AMD have lost nearly two-thirds of their
value and currently its market value is at about $1.4 billion. Its long-term
debt and capital lease obligations stand at $2 billion, Reuters said.
Like most other companies in the United States and
elsewhere, it has been struggling and trying to cut costs by laying off
employees. Analysts are concerned that it may not find a new market for its
chips in time to reverse a declining cash reserve.
Rather than selling AMD, bankers could help the
chipmaker strengthen its finances in order to acquire technology it believes it
needs to tackle new markets, Reuters said quoting Williams Financial analyst
Cody Acree.
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