Analysts Weigh In On Advanced Micro Devices Buyout Rumor
BLX was founded in 2002 and opened a Beijing-based computing client development center with AMD in 2003.
Commenting on the rumor, Bernstein analyst Stacy A. Rasgon seemed skeptical of a possible buyout offer and would be “surprised that Lisa Su’s first task as CEO would be to sell the company.” Rasgon also understood that Intel’s x86 cross-license with AMD “does not transfer under under a change of control” and that new licensing negotiations would be necessary.
In Bernstein’s latest analyst note on AMD, Rasgon felt that Q1 and 2015 guidance suggested the worst is not yet behind AMD and rated the stock Underperform with a $1.50 price target.
MKM Partners analyst Ian Ing noted that BLX and the Chinese government are seeking to grow intellectual property holdings and that acquiring AMD could make sense at the right valuation.
Even with an interest in expanding its IP portfolio, Ing commented that for BLX he was “not sure AMD’s product capabilities are worthwhile at the moment: their CPUs and graphics face intense competition and lack stability as a highly regarded management team attempts a turnaround.”
Ing felt that any potential suitor would need to retain key management and that “because of debt the enterprise value is high at ~$3B+.”
Advanced Micro Devices recently traded at 2.58, up 5.31 percent.
Note: MKM provided the following disclosure.
Latest Ratings for AMD
|Oct 2016||Credit Suisse||Upgrades||Underperform||Neutral|
|Sep 2016||Susquehanna||Initiates Coverage on||Neutral|
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