Publicly flogging oneself over one’s shortcomings is hardly a successful marketing strategy. However
Advanced Micro Devices (NYSE:AMD) seems to have done just that and the results were immediate. In July hopeful CEO, Mr. Rory Read, could only watch in terror as company shares dropped spectacularly 11% and 13%, evaporating respectively $441 million followed by another $448 million of shareholder money.
Yesterday’s drop of 2% (which still translates into about $60 million in further losses) pales in
comparison next to those devastating drops in price that seem to have been triggered by AMD news
announcements dated July 10 and July 20. The first of those concerned AMD’s own projections for lower than expected Q2 revenue, the second was a news post which states the exact unpleasant figures to the public.
The company, never failing to point the finger at Intel for aggressively targeting their clients, quotes
in its 10-Q filing a 2% drop in revenue compared to Q1, 2011. AMD seems willing to throw more ashes on its head, projecting a further shrink for Q3, 2012 in the 1-4% range. That looks like a slick slope to climb back up.
The directors of AMD seem unfazed by the questionable performance of CEO Rory Read, who is getting paid a very healthy $1.9 million despite the company stock’s downhill slide and Mr. Read’s dreary vision of the immediate future.
It’s not all sunshine and rainbows for AMD right now but they displayed solid performance in the past. The brains of Wall Street have underestimated them over the previous three quarters, with the company beating expectations with double-digit percentages that even reached 50%. If they could pull off the right moves before, there’s a possibility they could do it again, and if they do, shareholders may get some of their investments back.
The analysts generally see a positive development in the future of AMD, although there are those who
think the annual EPS could be negative, and the fact that AMD themselves have doubts about Q3 is hardly inspiring for investors.
One thing that may keep shareholder hopes alive is the research award AMD was granted by the U.S. Department of Energy. A one-time $12.6 million injection may not do much in the long run, but at least it shows that someone things AMD is a viable partner.
If the company does what it has previously shown it can and stops fidgeting over the bumps along the road, it may meet or even exceed expectations once more.
