Advanced Micro Devices Inc. (AMD) fell 3.4% to close at $23.31 on Tuesday after one of the company's biggest shareholders said it sold its stake in common shares of the semiconductor maker but also converted warrants into equity shares.
Abu Dhabi's Mubadala Investment Co., which is owned by the government of Abu Dhabi, said on Tuesday that it sold 34.9 million common equity shares in AMD, and plans to convert 75 million warrants in the U.S. chipmaker.
Still a Top Shareholder
Mubadala didn't disclose the sale price, but the market value of the 34.9 million shares was about $842 million based on Monday's closing stock price. The Abu Dhabi state fund, which has stakes in General Electric Co. (GE) and private-equity firm Carlyle Group, first invested in AMD in 2007.
"We remain amongst the company's top shareholders and are proud of our continuing partnership with AMD," Mubadala said in a tweet.
Yesterday after market close, we sold 34.9 million common equity shares in @AMD alongside announcing the conversion of 75m warrants into equity shares. We remain amongst the company's top shareholders and are proud of our continuing partnership with AMD. https://t.co/nNCCevdDUF pic.twitter.com/3wqcpQ0Ruv
- Mubadala (@Mubadala) February 5, 2019
Once the warrants are converted into equity, Mubadala, which has been a major investor in AMD for more than a decade, will retain a 6.9% stake in the company. The conversion of the warrants will provide $448.5 million to AMD, Mubadala said on Tuesday.
Monetizing Long-Term Holdings
"Today's transaction remains in line with Mubadala's overall investment strategy to monetize mature holdings to deliver attractive commercial returns," Mubadala spokesman Brian Lott told Abu Dhabi English news service, The National. "We have had a long-standing relationship with AMD over the past decade and remain among the company's top shareholders.
"We are proud of our partnership with AMD and are confident in the management team's ability to execute against their technology road map and deliver innovative products to the market."
Shares had been up more than 21% in the past three months through Monday, while the PHLX Semiconductor Index has gained 5.3% and the S&P 500 has remained about flat.