Advanced Micro Devices, Inc. (NASDAQ:AMD) announced that it intends to commence concurrent public offerings, subject to market and other conditions, of approximately $600 million of its common stock (the “Shares”) and $450 million aggregate principal amount of its convertible senior notes due 2026 (the “New Notes”). AMD is offering all of the Shares and the New Notes. In addition, AMD expects to grant the underwriters a 30-day option to purchase up to approximately $90 million of additional shares of common stock at the public offering price and up to $67.5 million principal amount of additional convertible senior notes.
AMD intends to use net proceeds of $1,020 million received from the offerings to repay its borrowings under its credit facility and/or to purchase its outstanding senior notes. After the completion of a tender offer for its outstanding senior notes, AMD has the option, but not the obligation, to call any and all of the untendered 7.75 percent Senior Notes due 2020 with any remaining net proceeds. AMD will use any remaining net proceeds for capital expenditures, working capital and other general corporate purposes. (Original Source)
Shares of AMD are down nearly 4% to $7.03 in pre-market trading. AMD has a 1-year high of $8 and a 1-year low of $1.65. The stock’s 50-day moving average is $6.78 and its 200-day moving average is $4.40.
On the ratings front, AMD has been the subject of a number of recent research reports. In a report issued on September 1, Jefferies analyst Mark Lipacis maintained a Buy rating on AMD, with a price target of $9, which represents a potential upside of 23% from where the stock is currently trading. Separately, on the same day, Mizuho’s Vijay Rakesh reiterated a Hold rating on the stock and has a price target of $7.00.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Mark Lipacis and Vijay Rakesh have a total average return of 22.1% and 28.2% respectively. Lipacis has a success rate of 79% and is ranked #9 out of 4147 analysts, while Rakesh has a success rate of 71.5% and is ranked #15.
Overall, 6 research analysts have rated the stock with a Sell rating, 5 research analysts have assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $5.80 which is -21.0% under where the stock opened today.
Advanced Micro Devices, Inc. is a global semiconductor company that develops computer processors and related technologies for business and consumer markets. It design and integrate technology for intelligent devices, including personal computers, game consoles and cloud servers. The company operates through the following segments: Computing and Graphics, and Enterprise, Embedded and Semi-Custom. The Computing and Graphics segment includes desktop, notebook processors, chipsets, discrete GPUs and professional graphics. The Enterprise, Embedded and Semi-Custom segment includes server and embedded processors, dense servers, semi-custom SoC products, engineering services and royalties.