tbh this smells more like budget management to me. Selling the site then leasing it back is likely to shift the expenditure to a different set of budgets with different constraints, and may make the accounts look better without actually saving money. Better looking accounts (and a higher balance book) will encourage investors, and happier investors are a big win for AMD.

scaryjim
tbh this smells more like budget management to me.

Indeed. Smells like someone's seriously after performance bonuses. Question is, will AMD realize they're being had?

To me this seems like they are runing out of money and are trying all the tricks in the book, dark days ahead for AMD.

howdee
… will AMD realize they're being had?

I'm not convinced they are being had. Budget restructuring can - AFAIK at least - do wonders for the profitability of a company without making a significant difference to their actual operating costs. It's all to do with what you can and can't offset against each other, I think - although I have to admit that even starting to think about finance and accountancy makes my eyelids heavy! ;)

According to the article AMD have cash reserves of ~ $1.5 billion - hardly running out of money. What they need is to be profitable - many more quarters of loss and the bank balance will start to look a little vulnerable, scaring off investors. A bit of book-keeping trickery to boost the balance sheet and make the company look more profitable will keep investors happy and give AMD a much better chance to follow through on their long-term plans. Not sure why everyone is predicting so much doom and gloom when AMD are actually still in reasonable shape. There's plenty of time for them to restructure, produce good new products, and flourish again. I suspect (although I don't have time to research it) that they're in much better shape now than they were in late 2008/early 2009…

scaryjim
Not sure why everyone is predicting so much doom and gloom when AMD are actually still in reasonable shape.

Its a chicken little mentality.

And trolls like OBR foaming around their mouths while having massive erections about the prospect of AMD going under… A mentality I've never understood myself, if the tables were turned I wouldn't want Intel to fail despite my bias towards AMD, although if the tables were turned I'd probably be supporting Intel.

The idea of an intel monopoly has to be horrifying for even their most ardent fans. Imagine the CPU's you love suddenly doubling in price….

Although I'm not saying the future is particularly rosy for AMD, people saying that this sounds like a last resort and trying all the tricks in the book is pretty far from the mark.

Sale and Leaseback (SLB) is a massively common form of financing, for both existing properties and new builds. Tesco and many of the other supermarkets fund many of their stores this way to keep the debt on their balance sheet down.

Basically what AMD has done is equivalent to borrowing secured against the property, but is accounted for differently show it doesn't show up as debt.

http://en.wikipedia.org/wiki/Sale_and_leaseback#Commercial_real_estate

TeePee
The idea of an intel monopoly has to be horrifying for even their most ardent fans. Imagine the CPU's you love suddenly doubling in price….

IMHO intel will gain a full monopoly……….in x86.

Unfortunately for intel, at that time, everyone will be using ARM CPU's, many made by AMD.