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.