Friday, November 30, 2012

Advanced Micro Devices, Inc. (NYSE:AMD) Shares Attracting Buyers On Realty Sale Plan

Chip maker Advanced Micro Devices, Inc. (NYSE:AMD)’s plans to sell its campus in Texas, led to a surge in its shares by more than 8 percent.

The company seeks to raise $150 million to $200 million in a transaction that may close in the first quarter, said Drew Prairie, a spokesman.

The plan is to sell the site and the lease it back for several years.

The personal computer industry is currently in a downturn as customers are increasingly turning to tablets and smartphones for their computing needs. Chip makers such as AMD have been at the receiving end of this and there are concerns among analysts with AMD may well cease to exist in about two years.

The cash raised through the sale of real estate will help the company but analysts said that if the company wants to be competitive it needs more funds. The company is estimated to run through about $100 million this quarter.

AMD shares rose 8 cents, or 4.1 percent, to $2.04 at the close in New York after earlier touching $2.12. The stock has lost 62 percent of its value this year.

Last month the company guided for a fourth-quarter sales that fell short of analysts’ estimates and said it will cut 15 percent of its staff, citing weak demand across all product lines in a challenging economic environment.

For AMD it is very important to raise its cash reserves in order to be sustainable in the short term.

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