Apple Dubai? They Make the iHasoob, Don’t They?
ALEXIS GLICK: “There’s some news coming across the tape right now. We’re seeing from The Wall Street Journal that Apple is buying an 8% stake in AMD.”
PETER BARNES: “The big chip-maker, yup. And AMD and Intel battle back and forth, and so this is a very significant statement by Apple, Charles and Liz, is it not, that it’s going to buy into AMD, pick one of the two?”
[one-year charts of Apple and AMD]
CONTRIBUTOR CHARLES PAYNE: “Well, yeah, and AMD needs, uh–that’s real smart by Apple because AMD is in trouble right now. AMD has always had two problems: either it had a great product that was either sometimes superior to Intel but not the distribution, or it would have a terrible product that obviously they couldn’t compete. And they’re sort of in the middle right now–they haven’t had great product offerings per se recently, the stock has been really just sort of muddling along, so I gotta tell you, Peter, I think it’s a smart play by both companies to get involved with each other.”
GLICK: “That, oh, it’s not Apple. Let me just correct ourselves here. It is not Apple. [cross talk] Alright, I’m sorry, we got a little ahead of ourselves here on that. Um, Apple Dubai?” [sic]
Contrary to earlier reports, it was Abu Dhabi, not Apple (or “Apple Dubai”) that paid $622 million for an 8.1% stake in Advanced Micro Devices today. Orchestrated by the Mubadala Development Company (the investment arm of the Abu Dhabi government), the deal will make the Persian Gulf emirate one of the chip-maker’s biggest shareholders. And it will give AMD, which posted a loss of $396 million for its third quarter, some much-needed financial relief as it faces increased competition from rival Intel.
Said Roger Kay, principal analyst with Endpoint Technology Associates, the deal is a “pretty good one for AMD. What AMD wants is access to short- and intermediate-term financing. Abu Dhabi represents a pretty good partner, since they’re not on the board and it’s not structured as debt.”