AMD Shares Crash on Goldman Sachs Downgrade

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AMD's shares took a bit of a beating today after an analyst from Goldman Sachs downgraded the company's stock to "sell." Odd seeing much of AMD's recent progress wiped out like this by a single analyst sitting in a cubicle somewhere.

With sales of PCs slowing to rates not seen since records have been kept, the outlook for AMD, Covello argues, despite winning supply contracts from both Microsoft and Sony in forthcoming gaming systems, doesn’t justify its recent rise to as high as $4.40 a share. AMD was trading at $3.80 a share, down 59 cents with 30 minutes to go in the session.
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Does this mean that same analyst can now buy the cheaper stock then say "we'll maybe I was wrong."
 
A good time to buy AMD was at under $2. Now is an okay time. Fuck the analysts BS though, it's going up (slowly, very slowly) for some time. I see at least $6 a share by the end of 2013.


Note: Don't listen to me.
 
Steve said:
AMD's shares took a bit of a beating today after an analyst from Goldman Sachs downgraded the company's stock to "sell." Odd seeing much of AMD's recent progress wiped out like this by a single analyst sitting in a cubicle somewhere.
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I always wonder about so called analysts as I am not convinced their opinions are entirely innocent. You always start to wonder when some loud mouth analyst makes a statement, "who stands to profit from this?"
 
If you're a truly good trader, you don't listen to analysts. 99.9999999% of them learned from reading a single book written by the same wrong guy. That one guy who didn't read it, that's you (the one who's different), is the only one who knows what's good.
 
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To be fair it did go way down yesterday, but it's still at the same price it was 5 days ago.
 
amdgamer said:
I always wonder about so called analysts as I am not convinced their opinions are entirely innocent. You always start to wonder when some loud mouth analyst makes a statement, "who stands to profit from this?"
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Someone who was in the know probably shorted and made bank.
 
Nothing like some good old fashioned stock manipulation to get the goldman boys just a little bit richer.
 
Can one man have this much influence over a companies stock? So if he said sell Microsoft or Intel stock, their stock would plummet?
 
Of course no one is considering that this is true. AMD is in a bad spot and when someone points out the obvious, its suddenly some evil investor plot to steal a lollipop from a child.
 
Mr Mean said:
Can one man have this much influence over a companies stock? So if he said sell Microsoft or Intel stock, their stock would plummet?
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I think it would depend on the company's financial ability. For large companies like Microsoft or Intel, investors have better confidence in them and so they can't pull of stuff like that. Only when people have little confidence that they would tend to respond.
 
people took profits after it rocketed from 2.50 to 4.40

If I made 76% profit, I'd sell it all too.
 
I remember someone on this forum having said they bought a ton of AMD stock @ $6 (this was a few years ago). I feel bad for him!
 
colinstu said:
I remember someone on this forum having said they bought a ton of AMD stock @ $6 (this was a few years ago). I feel bad for him!
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AMD was still selling in the $5-$10 range up until March.

Mr Mean said:
Can one man have this much influence over a companies stock? So if he said sell Microsoft or Intel stock, their stock would plummet?
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Stocks rise and fall based on buy/hold/sell recommendations a lot and even on articles.

For example: Seeking Alpha came out with an article calling RSOL a "Diamond in the Rough" yesterday morning and this happened:

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They only made $40m of EBITDA this last qtr, $30m in 4Q12. Enterprise value is $4.9B. This means they're trading at a 30x EBITDA. A good company will normally trade at 9-10x. Furthermore, free cash flow is negative meaning they're burning through cash in order to maintain operations. They recently had to do a sale and leaseback of their texas campus.

These are not the signs of a successful company let alone a company that's trading at a discount to its intrinsic value.
 
Seventyfive said:
They only made $40m of EBITDA this last qtr, $30m in 4Q12. Enterprise value is $4.9B. This means they're trading at a 30x EBITDA. A good company will normally trade at 9-10x. Furthermore, free cash flow is negative meaning they're burning through cash in order to maintain operations. They recently had to do a sale and leaseback of their texas campus.

These are not the signs of a successful company let alone a company that's trading at a discount to its intrinsic value.
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B-but it was Goldman Sachs that did it! It's their fault and it was a nefarious plot they cooked up to make money! *tinfoils entire body*
 
Seventyfive said:
They only made $40m of EBITDA this last qtr, $30m in 4Q12. Enterprise value is $4.9B. This means they're trading at a 30x EBITDA. A good company will normally trade at 9-10x. Furthermore, free cash flow is negative meaning they're burning through cash in order to maintain operations. They recently had to do a sale and leaseback of their texas campus.

These are not the signs of a successful company let alone a company that's trading at a discount to its intrinsic value.
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Sorry, didn't realize they had $1B of cash. If I use that to reduce debt I get an enterprise value of $3.9B which means it's trading at 24x. If we say the company should trade at 9.5x the $160m of ebitda + $1B of debt / 714m shares, I get ~ $3.50/sh. That seems to be pretty reasonable if not generous.
 
Hornet said:
I think it would depend on the company's financial ability. For large companies like Microsoft or Intel, investors have better confidence in them and so they can't pull of stuff like that. Only when people have little confidence that they would tend to respond.
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Someone hacked a twitter feed announcing about explosions at the White House, which sent the stock market in a free fall for a few minutes.

http://www.dailykos.com/story/2013/...ransparently-bogus-tweet-from-AP-Twitter-feed

The scary thing about the market is it doesn't matter if the facts are true or not because everything is controlled through algorithms and derivatives so a computer can't tell initially to distinguish fact from fiction, which is why you see all kinds of panic when certain announcements are made or similar events occur as I just described.
 
Yes, everything is computer controlled these days, it feels like slot machines in Vegas.

The market is a complete gamble with no rhyme or reason. Just look at Tesla stock over the past month.
and a while back, Netflix.
 
dr.kevin said:
Yes, everything is computer controlled these days, it feels like slot machines in Vegas.

The market is a complete gamble with no rhyme or reason. Just look at Tesla stock over the past month.
and a while back, Netflix.
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I'm still kicking myself for not buying Tesla when it was $28/share a month or so ago.
 
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