This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Companies That Might Not Survive This Crisis

Stocks in this article: AMD JMBA INTC

Advanced Micro Devices (AMD)

  • Market Cap: $1.4 Billion
  • Z-Score: 0.21 (as of September 2008)
  • How the mighty have fallen! AMD was once a genuine competitor in the global semiconductor business. Its market share (2.9%) and global ranking (no. 8) in the industry peaked in 2006, but was still dwarfed by Intel (INTC) that has a vise grip over the industry, with market share in the 12-13% range (Market share and ranking data source: iSuppli Corp.). AMD's market cap also peaked in 2006 at around $24 billion. Revenues peaked in 2005 at about $5.85 billion.

    However, strategic mistakes have since plagued the company. AMD over expanded its production facilities, knows as "fabs" in the industry. In 2007, the company made mistakes with the design and production of its quad-core server and desktop chips. Earlier this month, AMD announced that it was going to delay a planned spin-off in the company's attempts to outsource its chip production.

    Now, AMD faces declining market share, an economic dilemma and cash-rich competitors, such as Intel and Texas Instruments (TXN), which can weather the current storm.

    AMD's debt rating is CCC+, which is categorized as "junk." In 2005 and 2006 combined, the company generated nearly $2.8 billion in cash flow from operations. In 2007 and 2008, the company burned a lot of cash (while I don't have the exact amount, I estimate the total to be just over $1 billion). AMD's debt grew from $1.3 billion at the end of 2005 to $4.7 billion at the end of 2008.

    When you put this all together, AMD is in serious financial distress. If the company cannot sell or spin off assets and the chip business remains weak, AMD will have to put itself up for sale or face the possibility of bankruptcy.

    2 of 4

    Select the service that is right for you!

    Action Alerts PLUS
    Try it NOW

    Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    • Weekly roundups
    TheStreet Quant Ratings
    Try it NOW
    Only $49.95/yr

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    • Upgrade/downgrade alerts
    Stocks Under $10
    Try it NOW

    David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    • Weekly roundups
    Dividend Stock Advisor
    Try it NOW

    Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Alerts when market news affect the portfolio
    • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
    Real Money Pro
    Try it NOW

    All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

    Product Features:
    • Real Money + Doug Kass Plus 15 more Wall Street Pros
    • Intraday commentary & news
    • Ultra-actionable trading ideas
    Options Profits
    Try it NOW

    Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

    Product Features:
    • 100+ monthly options trading ideas
    • Actionable options commentary & news
    • Real-time trading community
    • Options TV
    To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
    Submit an article to us!


    DOW 17,582.35 +225.48 1.30%
    S&P 500 2,026.61 +13.72 0.68%
    NASDAQ 4,709.8710 +65.5590 1.41%

    Brokerage Partners

    Rates from

    • Mortgage
    • Credit Cards
    • Auto

    Free Newsletters from TheStreet

    My Subscriptions:

    After the Bell

    Before the Bell

    Booyah! Newsletter

    Midday Bell

    TheStreet Top 10 Stories

    Winners & Losers

    Register for Newsletters
    Top Rated Stocks Top Rated Funds Top Rated ETFs