After it pays off a $452.4 million federal loan, Tesla says in a filing today, it will have $678.8 million in cash and cash equivalents, and long term debt of $600 million.

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Goldman Sachs Group Inc. and Deutsche Bank AG sold the debt for Apple to investors in all corners of the credit markets, from buyers overseas to municipal-bond investors to portfolio managers who typically prefer ultrasafe government debt. Pension funds, insurance companies and hedge funds also joined in the scramble.

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The offering generated more than $50 billion in new orders, people familiar with the offering said.

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The software giant sold $1.95 billion in the U.S. market, the company’s fifth U.S. bond deal since 2009, when it sold its first debt, according to data provider Dealogic. The company also shopped debt in the euro market for the first time, seeking to raise €550 million ($715 million) with a 20-year maturity.

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Fitch, the debt ratings agency, just sent word that it has downgraded AMD’s long-term debt to CCC from a B. For context, a B rating indicates debt that is considered two notches below investment grade, while CCC is three notches below. A company rated CCC, according to Fitch’s terminology, is considered “currently vulnerable and dependent on favorable economic conditions to meet its commitments.”

Specifically, Fitch says it expects AMD’s free cash flow to turn negative and reach a level below AMD’s targets, and it might even go so low as to “potentially approach the company’s minimum operating level.”

On top of that, Fitch expects sales growth to run in the mid to high teens as consumer spending on PCs continues to sputter and tablets like the iPad continue to eat into the notebook PC business.

As of the end of last year, Fitch said, AMD had enough cash, at $1.18 billion, on hand to keep things going, but as cash flow turns negative and big payments to its manufacturing partner, Globalfoundries — $215 million in 2013 and $200 million in 2014 — come due, the pressure will mount as the year goes on. “Fitch expects negative FCF of $250 million to $450 million for the current year, pressuring liquidity by the end 2013. The company has a stated target cash level of $1.1 billion and minimum operating cash level of $700 million,” the agency said. AMD’s total debt as of the end of 2012 was $2.1 billion.

AMD’s not sitting still. Restructuring measures under way are supposed to save $450 million in operating costs by September, and it has cut a sale-leaseback deal on its 58-acre campus in Austin that is expected to save between $150 million and $200 million. Cash consumption has, of course, been an ongoing concern for some time.

That may help buy a little time, but Fitch isn’t convinced: “Given AMD’s traditional PC markets represent the vast majority of sales, achieving the company’s target of 40-50 percent of sales from higher-growth markets will require a number of years.”

AMD reported a fourth-quarter loss that widened on weak PC sales, and is expected to announce another round of job cuts soon. In October it cut about 14% to 15 percent of its workforce, including cuts to be carried out by the end of the current quarter.

SurveyMonkey has raised a massive $800 million in debt and additional equity funding, which it plans to distribute in a tender offer, said sources with knowledge of the situation.

It is one of the largest private capital raises for an Internet company.

The move is being done to allow employees and early investors to cash out of the Palo Alto, Calif., online polling company, since it does not have current plans to go public.

That will presumably occur, though, with this financing valuing the under-the-radar SurveyMonkey at $1.3 billion, sources added.

About $450 million of the total will be from new investments from a number of key investors, including CEO Dave Goldberg and Tiger Global Management.

But one new investor is an interesting one — Google — and not through its Google Ventures arm. Instead, it is via a new investing vehicle that has been created at the search giant that is focusing on late-stage companies — like SurveyMonkey — which have a proven business model.

In fact, the company is profitable and has been funding its operations and expansion from current revenue.

But there was a feeling that early investors — such as Bain Capital and Spectrum Equity, as well as early employees, including its original founder — should be rewarded, since there is not an IPO in the near future.

That said, Spectrum, which bought the company in 2009 and brought the well-regarded Silicon Valley entrepreneur Goldberg in as CEO, will retain a large stake in the recapitalization.

The $350 million in debt is being led in a syndicate by J.P. Morgan Chase, said sources.

Wall Street is certainly enthusiastic for such an outcome — even grabbing onto a specious rumor that perhaps Google was sniffing around the troubled Chicago-based social discount deals company, which is currently valued at just over $3 billion. On Friday, Groupon’s stock jumped 23 percent on takeover speculation after Tom Forte of Telsey Advisory Group was quoted as saying: “Where the stock is currently trading, it’s a takeout candidate.”

Actually, the stock has been trading at these levels for a very long time, so the sudden attention is decidedly overwrought. More to the point, sources close to Google — which had offered $6 billion for the company before it went public — said that Google has not been contemplating a second foray into acquiring Groupon.

The same is true for eBay, said sources, and Amazon is an unlikely buyer because it already owns a stake in LivingSocial, the second-largest daily deals provider. Additionally, there are lots of other problems that any purchaser would face in buying the company, which sells everything from bikini waxes to GPS devices at a discount.

In an onstage appearance this morning, CEO Andrew Mason declined to address the thinly sourced rumors of a takeover. “What I have said about Groupon is everything I will say about it,” he said. “I am focused on looking forward.”

Given the non-answer, it’s still prudent to ask, is there actually a buyer for Groupon?

First, let’s address the price. Two years ago, Google offered to purchase Groupon for $6 billion. A year later, it went public at $10 billion, and today, it is trading for $2.9 billion. The company has $1.2 billion in cash, and owes merchants about half of that, or around $573 million.

That said, it is still a relatively low price for a company that includes a customer base of 40 million people who bought something in the past year, a hodgepodge of local retailers and merchants that consider Groupon their online marketing channel, and — perhaps most importantly — a better-than-expected mobile business that now represents a third of its transactions.

But, while it costs much less than it once did, that doesn’t necessarily make Groupon a steal.

That’s because over the past year, the Chicago company has stumbled operationally. Europe is underperforming, the company’s main coupon business is slowing as the novelty of the business is wearing off and it has started investing heavily in selling products, a low-margin business that requires tons of logistics to package and ship items to people’s front doors. On top of that, the board recently discussed replacing Mason, who some directors fear may not be the right choice to continue leading the company. While they ultimately decided to keep him, it was a perceptual blow.

At least one big investor is betting something will happen: Tiger Global Management, which recently bought up close to 10 percent of Groupon. The well-regarded hedge fund and private equity firm may be betting it can’t get worse, and perhaps would even push for a sale.

In any case, here’s a look at some of the scenarios:

Google

When Google made the offer two years ago, the search engine was interested in entering the daily deals business as a way to gain a foothold into all things local, including commerce. Since Groupon rejected that $6 billion acquisition, Google has spent the past two years building Google Offers.

While Google Offers still has a very small piece of the market, it has been pivoting toward an integrated ads model, which is less complementary to Groupon’s approach. Google believes that merchants will pay Google only after a purchase has been made, and the sum will be determined by the consumer. The cost per acquisition model is very different from Groupon, which has the consumer paying up front for a heavily discounted coupon.

As one source with knowledge of the situation said: “The timing would be a bit wacky.”

That said, Nikesh Arora, Google’s SVP and chief business officer, had been a very strong advocate of the original deal and might still want more heft in Google’s corner in the competitive local scene. One major plus is that Groupon could also help build a local salesforce to push Google+ Local, which includes Zagat, the online reviews site that competes against Yelp. Groupon might also support its Google Wallet business, which has largely failed to gain traction among consumers.

Another source familiar with the two companies said running a daily deals business is “operationally intensive, and it’s a muscle that Google doesn’t have, so from a synergy standpoint it would be complementary.” But, “if they are still serious about local, is that the business model for local that they want to pursue?”

eBay

For the past two years, the e-commerce company has aggressively been going after the local commerce market by helping transactions occur online or at a nearby store. Additionally, its PayPal division is moving fast into the physical payments space. Strong merchant relationships, like the ones Groupon has, could go a long way toward making those things happen faster.

EBay recently raised $3 billion in debt financing and has $7.3 billion cash on its balance street. Its stock price also has gone up more than 65 percent in the past year, giving it plenty of fire power to make a big move.

It also has the stomach for acquisitions. However, many of its purchases over the past two years have been about buying technology and talent. It bought RedLaser, the barcode scanning technology for $10 million; Milo.com, a local inventory company, for $75 million; and Zong, a mobile payments company, for $240 million. Over the years, it has also made substantial purchases, including GSI last year for $2.4 billion, Bill Me Later for $1.2 billion and Skype for $2.6 billion.

A few months back, the company entered the daily deals business with the launch of eBay Lifestyle Deals, which runs daily deals in a number of markets, including San Francisco, Seattle, Los Angeles and Washington, D.C. To do so, eBay teamed up with Signpost, which arranges the deals with local merchants. Interestingly, Signpost is backed by Google Ventures, and already provides deals for Google Offers.

The company is also experimenting with eBay Now, a service that allows consumers to buy something on their phone and have it delivered within an hour. “They continue to be interested in local, and they have this experiment going on right now with eBay Now, but they are still iterating and figuring out the local angle,” one source said.

Likewise, PayPal’s local strategy is under development. It is trying to roll out physical payments to big-box retailers like Home Depot while also offering a credit card reader for smaller retailers called PayPal Here.

The biggest argument against this deal is that eBay may not need Groupon, and that it already has the infrastructure to roll out deals through partnerships — which would cost a whole lot less and be a lot less painful.

Amazon

Simply put, Amazon already has its own troubles with its significant stake in LivingSocial, which just slashed 400 jobs. In the third quarter, Amazon took an impairment charge of $169 million, or 37 cents a share, related to its stake in LivingSocial, resulting in the company reporting an overall third-quarter net loss of $274 million, or 60 cents a share.

Any potential Amazon-Groupon tie-up would then be a merger between LivingSocial and Groupon, creating perhaps an even bigger black hole that would also result in a lot of ongoing integration problems. While together LivingSocial and Groupon would easily make Amazon the largest daily deals company and up its local commerce efforts, it’s still not clear if the online retail giant wants to double down here.

Separately, Amazon has entered the daily deals business on its own with a service called Amazon Local that competes directly with LivingSocial and Groupon. The offers became particularly interesting to the company after it started using them to discount the price of its Kindle e-readers and tablets. If owners don’t want to see the offers, the tablets can cost up to $40 more.

The company has said that it essentially doesn’t need help building the business – it thinks it can get to scale fast in the space because it already has 164 million active customer accounts worldwide (which are defined as people who have made a purchase in the past year).

Perhaps most importantly, though, Amazon has a history of building, not buying.

Visa, MasterCard, American Express

These three payment companies have huge market values, and should not be discounted as players in the local commerce space. In addition, a year ago, all of them started looking for new revenue streams after the Durbin Amendment capped the amount that banks and card networks charge merchants on debit card transactions.

Already, many banks are sending targeted ads or deals to consumers based on their spending habits. However, it’s unclear whether they need to be the actual deal makers, or just act as a distribution system for advertisements and coupons. For example, MasterCard recently partnered with Gilt City, the daily deals division of Gilt Groupe. Through the partnership, MasterCard will be able to offer its users deals for restaurants, concert tickets and travel, and at the same time, help Gilt City get in front of some of the card issuer’s millions of users.

MasterCard may be the frontrunner of the three as a potential suitor. Not only has it shown direct interest in the space, American Express is still absorbing its acquisition of Revolution Money, for which it paid $300 million cash in 2010, and Visa has been active with its purchase of CyberSource for $2 billion in 2010. More recently, it made an investment in Square, the hot mobile payments company.

Other Suspects

A number of other companies could be put on a Groupon acquisition list, such as Yahoo, Microsoft and Facebook.

Microsoft and Yahoo both have the money, but have not done much in the space so far. An acquisition would allow them to catch up quickly, but would be expensive and largely not complementary with what they are doing already — which is almost nothing. Facebook, in particular, tried once to enter the space and failed and might be focused on other lower-hanging revenue sources.

Groupon could also look to private equity firms for a buyout, which would allow it to have some space while it fixed some of its issues.

Internationally, there is Japan’s Rakuten, which owns Buy.com in the U.S., and China’s e-commerce giant Alibaba, which has been looking at ways to enter the U.S. market.

Of course, Groupon might simply keep stumbling forward and hope it can turn itself around. But, at some point, without improved revenue and cohesion at the top levels, something is sure to bring pressure to its options. 

In fact, in afternoon trading today, the rumors continued to keep the stock elevated. Shares closed 3.76 percent higher today at $4.41 a share.

Moody’s said that while HP will remain the leader in several market segments for the time being, its “credit profile will remain weaker than previously expected over the intermediate term.”

HP’s debt load, and the expenses it incurs to borrow, have become an ongoing concern; over the summer, credit default swaps on its bonds — essentially the insurance that debt investors buy to protect against the possibility of a default — were “blowing out,” as the term of art goes.

The end result of downgrades like this is that when HP next goes to the debt markets to borrow money to finance some aspect of its operations, it will probably have to incur higher costs to do it.

It was the second downgrade on HP’s credit rating by Moody’s this year. The last one was in January. Previously, both Fitch and Standard and Poors cut their ratings on HP late last year. Fitch has had a negative outlook on HP since then.

One thing HP doesn’t have is downgrade triggers on any of its debt. Sometimes companies have triggers written into their debt agreements that have the effect of accelerating the maturity dates by which the debt has to be repaid. But, as HP conceded in its most recent 10Q filing with the U.S. Securities and Exchange Commission, the downgrades already incurred have increased the cost of borrowing and overall reduced its capacity to borrow.

HP does have pretty ample cash reserves, and Moody’s even says as much in its announcement: $11.3 billion in cash and equivalents as of the end of the most recent quarter, and it said it expects that level to remain north of $8 billion for the forseeable future. Add to that an expected $4 billion in free cash flow in 2013, and it makes it unlikely that HP will need to borrow anytime soon.

Another bit of good news for 2013 is that HP has about $5.5 billion in debt maturities due, starting with a $1.5 billion payment in March and additional payments due in May, August and September. But there’s another $8 billion and change due in the following two years. Some will be repaid, some refinanced.

Whatever the outcome, today’s downgrade is a step in the wrong direction from what CFO Cathie Lesjak talked about at HP’s analyst’s meeting in San Francisco last month. At the time, she said getting HP back to what she called a “Mid Single-A” credit rating is “a top priority for us.” The only way to do that, she said, was to reduce the net debt load of the operating company — the portion of the debt not held by the finance division that is there to help customers buy HP gear — to “roughly zero.” That will take time.

Here’s the full announcement, courtesy of Moody’s:

Rating Action: Moody’s lowers Hewlett-Packard’s senior unsecured rating to Baa1, outlook negative
Global Credit Research – 28 Nov 2012
Approximately $25 billion of debt securities affected

New York, November 28, 2012 — Moody’s Investors Service lowered the long term credit ratings of Hewlett-Packard (HP), including the senior unsecured rating to Baa1 from A3. The Prime-2 short term rating is affirmed. This concludes a review initiated October 4, 2012. The outlook is negative.

RATINGS RATIONALE

The new rating reflect our expectations that “although HP will maintain strong to leading positions in a number of product areas, the company’s credit profile will remain weaker than previously expected over the intermediate term,” said Moody’s senior vice president, Richard Lane.

The negative rating outlook reflects our concerns about HP’s ability to contend with the significant competitive, secular and execution challenges facing the company. A “broad portion of HP’s portfolio, including PC’s, some enterprise servers, printers, and services, representing over 75% of revenue, will face slow to no growth prospects over the coming years,” said Lane. The ability to restore growth and profitability has sufficient uncertainty that we believe event risk in the form of more shareholder friendly actions or portfolio repositioning could develop, which would pressure the company’s credit ratings.

Key drivers to the projected credit profile include “company-specific execution challenges in services and software, secular shifts in PCs and printing, competitive pressures throughout its broad portfolio, as well as a cautious demand environment,” said Lane. As a result, we expect HP’s revenue will decline 5% next year while operating margins approximate 7% as compared to a nearly 9.8% historical average prior to 2012 (using Moody’s standard adjustments). We also anticipate free cash flow (post dividends) of approximately $4 billion next year, down from our prior expectations of $6 billion to $7 billion, driven by restructuring related cash outflows and overall weaker operating performance.

We believe HP will remain committed to reducing gross debt over the intermediate term after having reduced debt by $2.2 billion in 2012. We anticipate HP will repay at least half of its debt maturities over the next few years. In fiscal 2013, debt maturities total $5.5 billion with $1.5 billion due in March, $1.75 billion in May and $1.1 billion in each of August and September. HP has $4.9 billion and $3.2 billion of debt maturities in 2014 and 2015. Assuming HP repays approximately half of its debt maturities and refinances the rest, we project HP’s adjusted debt to EBITDA, estimated at 2.0x at October 2012, will approximate 1.9x at the end of 2013 and potentially 1.6x by 2015.

Ratings lowered include:

senior unsecured rating to Baa1 from A3

subordinated rating to (P)Baa2 from (P)Baa1

preferred rating to (P)Baa3 from (P)Baa2

Rating outlook negative

We expect HP’s acquisition activity will be minimal over the next few years as management focuses more on internal research and development over acquisitions, where HP has demonstrated a poor track record. While the less acquisitive posture reduces event risk, this approach also raises the potential that HP could lose some competitive ground against peers who have more flexibility to get to market faster with products and technology offerings via acquisition.

HP maintains a solid liquidity profile. At the end of October 2012, HP had $11.3 billion of cash and equivalents and we expect HP will maintain cash balances in excess of $8 billion. While a significant portion of this cash is held offshore, the company has tax efficient access to material amounts of this cash. We project about $4 billion of free cash flow in 2013, with the first half being weaker than the second half due to some seasonality and heavier restructuring cash outflows (primarily headcount).

The company maintains solid alternate liquidity to support outstanding commercial paper ($574 million at July 2012) in the form of a $4.5 billion bank facility maturing February 2015 and a $3.0 billion bank facility maturing March 2017. Both have one financial covenant under which HP has ample room, and no need to represent as to no material adverse change.

HP’s ratings are unlikely to be raised over the next year. The rating could be stabilized over the 12 to 18 months if the company demonstrates consistent execution and progress in restoring sustainable profitability throughout its portfolio. Longer term, the ratings could be raised if the company: (1) demonstrates steady organic revenue growth; (2) is likely to sustain EBIT margins above 9%; and (3) adheres to its conservative financial practices which include maintaining significant liquidity and a modestly leveraged balance sheet such that adjusted debt to EBITDA were below 1.5x on a sustained basis.

HP’s ratings could be lowered if the company (1) maintains adjusted debt to EBITDA above 2.0x; (2) EBIT margins fall below 6% for an extended period of time; or (3) deviates from our expectations of conservative financial practices.

For further information, please see www.moodys.com.

Hewlett-Packard, headquartered in Palo Alto, California, with $120 billion in revenue for the twelve months ended October 2012, is the world’s largest technology firm by revenue that designs, manufactures, and services computing and imaging systems and provides information technology and consulting services.

The principal methodology used in rating Hewlett Packard was the Global Technology Hardware Industry Methodology published in September 2010. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody’s affiliates outside the EU are endorsed by Moody’s Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody’s office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Information sources used to prepare the rating are the following: parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody’s Investors Service information.

Moody’s considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.

Moody’s adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody’s considers to be reliable including, when appropriate, independent third-party sources. However, Moody’s is not an auditor and cannot in every instance independently verify or validate information received in the rating process.

Please see the ratings disclosure page on www.moodys.com for general disclosure on potential conflicts of interests.

Please see the ratings disclosure page on www.moodys.com for information on (A) MCO’s major shareholders (above 5%) and for (B) further information regarding certain affiliations that may exist between directors of MCO and rated entities as well as (C) the names of entities that hold ratings from MIS that have also publicly reported to the SEC an ownership interest in MCO of more than 5%. A member of the board of directors of this rated entity may also be a member of the board of directors of a shareholder of Moody’s Corporation; however, Moody’s has not independently verified this matter.

Please see Moody’s Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.

Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.

The date on which some ratings were first released goes back to a time before Moody’s ratings were fully digitized and accurate data may not be available. Consequently, Moody’s provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating.

As the market for PC microprocessors — in which AMD has for decades been a far-distant No. 2 to the market’s global leader, Intel — has dwindled amid softening demand for PCs and servers, AMD has sputtered badly. Read is said to be assembling a new corporate strategy that would involve pivoting toward chips aimed at tablets and smartphones, and an update on that strategy is expected next week.

But in the meantime there is a new fundamental concern about AMD’s ability to survive long enough as a going concern to embark on that strategy: AMD is running low on cash.

The concern comes from Stacy Rasgon, an analyst at Sanford Bernstein in New York, who encapsulated his worries in a research note issued to clients today. Once bullish on AMD given its relatively low price and the prospect that AMD stood a fair chance of generating cash at a healthy clip, Rasgon has now changed his mind. “The combination of a weak PC market and poor execution is significantly pressuring the top line, while the company appears to be suggesting long term gross margins will be significantly lower than in the past,” Rasgon wrote.

AMD has $1.3 billion in combined cash and marketable securities as of the quarter ended Sept. 29, down from $1.6 billion at the end of the quarter ended in June. As its profit margins and free cash flow contract, AMD will consume cash at such a rate that it will be down to $600 million by the end of 2013.

On top of that, AMD’s debt load will become a more urgent concern. The company finished its September quarter with more than $2 billion in long-term debt, up from $1.53 billion in the June quarter. And the cost to protect against a default on that debt via credit default swaps has started to spike. As Bloomberg News noted today, debt investors think AMD has a 62.5 percent chance of defaulting on its debt within five years, up from 51 percent on Oct. 17, the day before it reported earnings.

It now costs more to insure against a default on debt from AMD than it does to insure debt from Finland’s troubled wireless phone concern Nokia, or from Freescale Semiconductor, also facing cash troubles. “Apparently the debt markets believe AMD is more at risk from liquidity issues than even Freescale. We think this is likely correct,” Rasgon wrote.

Without a turnaround in the market for personal computers — something that’s essentially impossible to predict right now — or a significant improvement in AMD’s ability to generate a healthy profit on its chips, the cash burn will continue.

If it gets as bad as Rasgon says it might, that’s going to raise some uncomfortable questions about AMD’s long-term viability and reignite the recurring takeover chatter that hits the company from time to time. The problem is, as we’ve pointed out a few times before, AMD will be a complicated company for any potential suitor to buy, mainly because of its unusual relationship with rival Intel.

It’s not the first time that the conventional wisdom has counted AMD down for the count. In the late 1990s, it was bloodied and beaten and seemed all but defeated. Then in 1999 it announced a novel approach to server chips that within a few years proved so successful in the marketplace that AMD gave mighty Intel some sharp competitive headaches.

A new strategy is coming. AMD is supposedly close to announcing something called an “ambidextrous” strategy that will in some way include using chip cores licensed from ARM, the British holding company whose technology lies at the heart of most of the chips powering the world’s smartphones and tablets, including the iPad, the iPhone and numerous devices running Android and Windows.

This would be a fundamental shift in AMD’s approach. Its prior CEO, Dirk Meyer, and his predecessor, Hector Ruiz, had been advocates of the so-called “x86 everywhere” philosophy. The phrase “x86″ refers to the basic instruction set used by chips from PC microprocessors from Intel and AMD. They are a key part of what makes a PC a PC, and give software developers the world over a common set of assumptions they can make when writing software.

ARM chips, on the other hand, are based around a fundamentally different set of instructions that, among other things, make them especially good at consuming very little power, a must in mobile devices. A variant of Windows known as Windows RT has only recently been created to run on a new generation of notebooks.

Many people expect AMD to supplement its current designs with an ARM-based design, and its recent hiring of a crack ARM designer — Apple’s former head chip designer Jim Keller — certainly raised a lot of industry eyebrows.

Whatever AMD does, it better do it fast.

Well, the spinoff idea is still alive and well, though this time the target is HP’s debt-ridden finance unit. The suggestion came today from UBS analyst Steven Milunovich, who in a research note to clients today not only suggested that HP should spin off the part of the company that helps customers finance their purchases, but convince rival Dell to do the same thing and combine both finance groups into a single independent company.

Here’s how Milunovich sees it: With HP’s net debt swelling from $12 billion to north of $20 billion over the course of the last year, of which $11 billion is due over the next two years, he reckons HP will be forced to do some fundamental corporate restructuring.

HP Financial Services (HPFS), he argues, may be a strategic asset in helping HP land deals, but with HP’s overall debt-to-capital ratio growing 43 percent, it might make a tempting target to carve off. It uses commercial paper and short-term notes to boost its liquidity. Having seen its credit rating cut recently, Milunovich worries that another cut — which he says isn’t likely to be imminent — might freeze HP out of participation from corporate debt markets.

Shedding HPFS, he says, might be the way to meaningfully reduce HP’s overall debt by about $10 billion and improve its overall cash flow.

Think of it a little like having a department store credit card. In its fiscal 2011, HPFS originated $6.8 billion worth of customer financing to corporate customers large and small buying servers, networking gear, software and paying for services. “Having HPFS in-house streamlines the sales process and offers flexibility. Rather than use a third-party financier, HP can take a holistic view during the sales process, managing both financing terms and the product sale to meet the customer’s needs,” Milunovich wrote.

It’s also profitable, having last year reported $348 million in profits on revenue of $3.6 billion. To that end, Milunovich concedes there are few reasons to actually spin it off. “But, taking the view of a potential suitor, we see room to reduce capital costs and to increase leverage,” he wrote.

That’s where the idea for the joint venture with Dell comes in. Combining them into a single, independent company might help both HP and Dell overcome inefficiencies in how companies finance their IT purchases.

“Although HP and Dell have different levels of balance sheet risk, both are tasked with re-inventing their business models amidst a challenging back-drop in PC and IT spending,” Milunovich wrote. “We think both would stand to benefit from such partnership while maintaining their individual competitive strengths and strategic focus.”

The idea comes two days before HP is set to convene a meeting with analysts in San Francisco, but don’t expect much to come of it. HP CEO Meg Whitman has already said numerous times that she sees strength in HP’s size and doesn’t foresee a scenario where any piece of it is carved off or sold.

According to sources close to the situation, Yahoo will officially close the multi-billion-dollar sale of half its assets in China’s Alibaba Group in one week.

Sources said the deal is set to be announced next Wednesday, in which the Chinese Internet giant will pay the Silicon Valley company $7.6 billion to buy back 20 percent of Alibaba. Yahoo still owns another 20 percent.

Yahoo will get $7.1 billion in the transaction, as well as a $550 million payment related to the ending of licensing fees that Alibaba has paid annually to Yahoo.

It’s a huge return from when Yahoo co-founder Jerry Yang led a $1 billion investment in the then-fledgling Alibaba seven years ago, with a belief in its CEO and co-founder Jack Ma.

But once-cordial relations between the companies became tense in the ensuing years, as Ma sought to lessen Yahoo’s 40 percent ownership.

After many public kerfuffles, Yahoo finally agreed earlier this year to sell half its stake. It still holds 20 percent, which could eventually reap even larger returns once the fast-growing Alibaba goes public in several years. Yahoo is required to sell 10 percent at that IPO and must sell the rest after that.

Still, Yahoo is getting a pile of money now. After taxes, that gives new CEO Marissa Mayer about $4.5 billion to use in some as yet undetermined way. But it will most likely be for a series of acquisitions to try to reinvigorate the long-troubled company.

Yahoo’s board and later its CFO Tim Morse had promised to return the money to shareholders by way of a stock buyback. But, last month — in a move that quickly depressed Yahoo’s shares and angered major investors — the company filed a statement saying that Mayer was reevaluating that move and could keep the money for other strategic reasons.

Given what a huge windfall it is getting, it will be interesting to see if the board of Yahoo — which is meeting next week, sources said — will choose to return a portion of the Alibaba money to shareholders. A recent similar move by AOL — using money it got from selling patents — was partially the reason for the recent run-up in its stock.

Yahoo could also presumably also give a special dividend to shareholders, but that is less likely.

That will be the question once Yahoo gets its cash in the kitty, which is no small feat.

The complicated transaction spans the globe, given the size of the borrowing — $8 billion, which will value Alibaba at $43 billion — that the company is doing to regain some control from Yahoo. The deal includes debt, as well as the sale of both convertible preferred and common shares, and includes a wide range of players.

That includes current investors, such as Silver Lake, DST Global and Singapore’s Temasek Holdings, as well as many others.

“This is a lot of money flying around the world to complete this,” said one person close to the situation.

Speaking of more money, it’s still unclear where Yahoo is in its long and very drawn out negotiations with its other Asian partner, SoftBank, over selling its stake in Yahoo! Japan.

Sources said the deal was proceeding well right before Mayer was hired, but that she slowed down the talks to reevaluate the prices being discussed. Since then, shares in Yahoo! Japan have appreciated strongly, while shares in Yahoo itself have lagged.

It’s a good thing that Yahoo has both its Asian assets — the value of them now makes up most of the company’s valuation.

Until, of course, Mayer figures out a way to turn the money Yahoo is getting into more gold.

An Alibaba spokesman declined to comment and Yahoo’s PR spokeswoman never speaks as per usual.

Neil Sedaka or Jack Johnson? Honestly, this is all beginning to sound a little too much like a bad mix from a lite-FM radio station. But here it is: Should Hewlett-Packard be broken up into parts, or should it stay together?

It’s an old question, dating back more than a decade, but it was raised anew today in a note by analyst Steven Milunovich at UBS Investment Research. His vote: Break it up.

Milunovich initiated coverage on HP today, after a break of several years, opening with a “sell” rating and a price target of $16, which would amount to a drop well below its current 52-week low, and would represent the lowest price that HP shares have seen in nine years. He then prefaces his argument with a history lesson: Way back in 2002, HP, under then-CEO Carly Fiorina, closed the $25 billion acquisition of Compaq Computer. Within a few years, HP leapfrogged Dell to become the largest PC vendor in the world, but the deal also gave HP some key assets it was missing in the enterprise hardware world. “Although historians likely won’t be kind to the merger, it’s not clear that HP would have been better off without Compaq,” he writes.

By 2004, Milunovich was arguing that HP should break itself into two companies: One focused on the enterprise, the other on consumers. On the enterprise side of the house, HP’s best course of action, he thought then, was to become an alternative to IBM.

No such breakup occurred, and now, 10 years after that enormous acquisition, HP finds itself “stuck in the muddy middle.” Of course, one CEO — Léo Apotheker — sought during his 11-month tenure to spin off the PC division; though, when combined with the costly $11.7 billion acquisition of the British software firm Autonomy and three consecutive quarters of results that came in below expectations, it wasn’t long before he was pushed out of his job.

New CEO Meg Whitman quickly undid Apotheker’s plan, arguing that HP is “better together,” a view she reiterated to AllThingsD in an interview in June. Instead, Milunovich argues, they might be “smart apart.”

With the printer business, a onetime cash cow now in a state of possibly permanent decline, and with PCs under attack by slowing growth generally and tablet substitution in the notebook business, HP’s strongest suits lie in the enterprise: “If HP is able to take advantage of cloud and big data trends, it should see modest revenue growth and margin expansion in ESSN, which is critical to offsetting the likely deterioration in printing,” he writes, referring to the old Enterprise Server, Storage and Networking group. A boost in software revenue would also boost profit margins.

And with HP shares currently trading at about four times estimated earnings for both 2012 and 2013, he compares its different segments and concludes they would trade at higher prices relative to competitors. The PC and printer groups could trade at six to seven times forward earnings; software and enterprise at 10x and services at 11x. Basically, break it all up and it could be worth between $27 and $34 a share, Milunovich writes.

But is it really that easy? The primary reason that Whitman gave for undoing the plan to spin off PCs was that HP’s scale alone gives it the ability to negotiate aggressively with suppliers of components used in other parts of the business. But she has also praised the unit’s overall return on invested capital. And there’s also a big batch of savings expected from this year’s combining of printing and PCs under Todd Bradley.

Much of it is a matter of time. Shareholders seem willing to give Whitman a certain amount of time to get the turnaround she has promised under way, and she has even taken to managing expectations by saying it will take years to get done. But if HP’s share price doesn’t respond, they may get impatient and start demanding a breakup. As Milunovich puts it, it would be interesting to see an activist investor like Carl Icahn or Bill Ackman get involved, though HP already has one of those on its board — Ralph Whitworth — and he has a history of lobbying for corporate breakups.

For now, it’s all an academic discussion. Whitman has made zero moves toward any kind of a breakup, and is clearly in the “better together” camp. My prediction is that Milunovich’s argument today is the starting gun to a broader discussion about how best to fit HP, and that the calls for a breakup are only going to get louder.

What tipped me off is the price of an obscure financial instrument known as a credit default swap. You may remember them from such hits as the great mortgage meltdown of 2008. While these credit default swaps have no connection whatsoever to mortgages, they do the same thing as the swaps did in that case: They serve as insurance.

When a lender worries about the likelihood that he’s going to get repaid, he can buy insurance against the chance that the borrower defaults. That’s essentially what a credit default swap is. You buy one, and if the borrower defaults, you get paid. If the borrower doesn’t default, whoever sells the swap pockets the fee, just like an insurance company. It’s a decent business, and there’s a thriving market for credit default swaps on all kinds of debts.

Anyway, last week I pulled some data showing that the price to buy this protection on HP’s debt has gone up — way up — since this time last year. In industry shorthand, the price to buy protection on $10 million worth of HP debt for five years has been “blowing out.” (Hence the movie poster from the forgettable 1981 John Travolta movie.) Protection a year ago that cost $65,000 has gone up to $325,000, while prices on the swaps covering debt on IBM and Oracle have stayed more or less flat.

And while it has no direct bearing on HP’s finances or operations — credit default swaps are derivative instruments — they do serve as an important barometer of the mood of bond markets that trade in debt. If the price to insure against the possibility of a default, however remote, is rising, the cost to take out new debt by issuing bonds can increase, as can the cost of refinancing existing debt. And when you consider that HP has a net debt burden of about $21 billion, a small increase in the costs associated with financing it can have a direct effect on operations.

Apparently I was on to something. It turns out that the “blow out” isn’t just happening to HP’s debt, but to debts held by Dell, Xerox and Lexmark, too. Today, The Wall Street Journal’s Rolfe Winkler looked at all three and saw similar pricing trends. The most extreme case was at printer maker Lexmark, where the cost of swaps on its debt have tripled to $590,000.

At a moment when other once-solid tech companies like Nokia and Eastman Kodak are in distress, more people are betting on — or insuring against — the possibility that HP, Dell, Xerox and Lexmark end up like them.

But another metric related to HP has in recent weeks started setting record highs. Prices on credit default swaps on HP’s debts have started to rise substantially, or, as pros in the corporate debt world like to say, “blow out.” The chart below shows the price progression since last July on credit default swaps for HP, IBM and Oracle, and you can see the striking disparity.

Now, without going too far into the weeds of corporate finance and debt (I wrote last month about the swelling debt on HP’s balance sheet), it’s important to understand what a credit default swap is and is not. Essentially, it’s insurance that you buy on a debt you hold to protect you against the possibility that the original debtor — in this case, HP — may default. The price of the swap was five times higher yesterday than it was at this time last year. As of yesterday, it cost $325,000 to insure $10 million of HP debt for five years, up from about $65,000 a year ago, according to data from Markit Group, which tracks the daily prices of credit default swaps.

It’s important to be clear on one point: No one is suggesting that HP is in any danger of defaulting on any of its debt. But for those holding HP bonds, the price of protection against that eventuality — however remote — is getting higher by the day.

And while the price of credit default swaps are mainly a barometer of the state of anxiety over its finances and its balance sheet, they can have the side effect of increasing the overall cost of HP’s financing activities and ultimately affecting its share price.

The pace in the increase of swap prices quickened last week following a perfect storm of bad news: There were lousy earnings reported by printing concerns Lexmark and Xerox, the apparent threat that HP may lose a key IT services contract at General Motors, and word that institutional investor James Chanos is shorting HP shares. The state of global PC sales in the second quarter and the disclosure that China’s Lenovo is drawing nearly even with market leader HP didn’t help.

Also consider this: HP has issued more than $10 billion worth of bonds reaching maturity in 2013 and 2014 on top of another billion and change maturing this year.

Typically, a company like HP can roll this debt over into new bonds relatively easily. But here’s the rub: HP’s credit ratings have slipped in recent months, increasing the cost of borrowing money generally. With less than a month to go before HP reports earnings for the quarter ending in July, no wonder people are getting nervous.

Note to the graph below: While the figures are given in dollars, the price is actually in hundreds of thousands of dollars. So yesterday’s price of $325 is actually $325,000, the spot price to buy protection against the loss of $10 million in debt.

(Thanks to AllThingsD’s Beth Callaghan for help with the chart and to The Wall Street Journal’s David Reilly for the quick lectures on the finer points of credit default swaps.)

The move follows another tough quarterly earnings report from the Finnish smartphone maker.

“Today’s rating action reflects our view that Nokia’s transition in the smartphone business will cause deeper operating losses and consequently cash consumption in the coming quarters than we had previously assumed,” Moody’s analyst Wolfgang Draack said in a statement. “A return to profitability in the Devices & Services (D&S) segment on the back of smartphones with the Windows Phone 8 mobile operating systems is by no means assured.”

The move follows a similar hit last week from ratings agency Fitch.

Nokia said it was disappointed by Moody’s action, but said it shouldn’t have a big impact on its operations. The company noted that it has a net cash balance of more than four billion euros, and access to an additional 1.5 billion euros via its credit line.

“We are quickly taking action to position Nokia for future growth and success,” Nokia CFO Timo Ihamuotila said in a statement. “Nokia will continue to focus on lowering the company’s cost structure rapidly, improving cash flow and maintaining a strong financial position.”

On that day, HP shares closed at $19.59. Yesterday, they closed at $19.55, marking what is officially a seven-year-low for the shares, a milepost I noticed was approaching last week. Of course it goes without saying that the drop amounts to a new 52-week low, as well.

HP shares continued their fall as markets opened in New York today. As I type, the shares are now trading at $19.36, down 18 cents, or nearly 1 percent.

It’s worth comparing 2012 to early 2005 by another number: HP’s long-term debt. The last time HP shares traded this low, it had $4.6 billion in long-term debt on its balance sheet. As of the quarter ended April 29, that figure has swelled by more than a factor of five, to $25.8 billion.

That figure by itself is alarming enough. But when HP’s debt situation is compared to its peers, the scale of the task ahead for CEO Meg Whitman becomes substantially more daunting.

HP’s net debt — the sum of its short-term and long-term debt minus cash on hand — amounts to slightly less than $21.8 billion, or about 56 percent of HP’s market capitalization as of yesterday’s closing price.

A June 11 research report by analyst Chris Whitmore of Deutsche Bank Securities called this figure out, and compared it to some of HP’s peers, including Dell, Apple and IBM. The graphic he prepared deserves a look, though it was created when HP’s net debt as a percentage of market cap was only 43 percent: Its share price has fallen that far since.

It’s an important figure, given the deteriorating conditions in the global economy, especially in Europe, where the ongoing sovereign debt crisis shows no sign of abating, and where HP historically does about 35 percent of its business, Whitmore argues. It’s a simple fact that companies with more cash and less debt on their balance sheets will probably have an easier time of it.

Mr. Falcone’s compromise is expected to prompt LightSquared’s lenders to approve a one-week extension on a debt-term violations waiver that expires Monday morning, the people said.

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The lenders are in talks with representatives of Mr. Falcone, the founder of Harbinger Capital Partners LLC and LightSquared’s main backer, over possibly extending a waiver on debt-term violations that expires Monday, the people said.

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“We now expect Nokia to report significantly lower margins and cash flows in 2012 than we had previously expected,” S&P said. “The outlook is negative, reflecting the possibility of a further downgrade if Nokia fails to stabilize revenues and margins and significantly cut its cash losses.”

Evidently Nokia’s ugly first-quarter loss and 30 percent drop in sales didn’t do much to reassure S&P that the company’s turnaround is a sure thing — even with its relatively well-received new smartphone, the Lumia.

“We still expect revenue from Lumia smartphones to grow over time but not sufficiently to offset a rapid decline in revenue from Symbian-based smartphones over the next few quarters,” S&P analysts said.

Another voice to add to what’s fast becoming a Greek chorus of Nokia doomsayers. The company has been slapped with three nasty credit downgrades in a row.

Earlier in the week, Fitch downgraded Nokia’s long-term credit rating to junk status; last week, Moody’s did the same thing, citing concerns about Nokia’s low-end phone business.

In an interview with Bloomberg, CEO Mark Pincus said he’s looking for both great teams and companies that have break-out hits.

It’s not a big surprise that the social games company would go on a buying spree.

As the largest social games developer on Facebook, it has created a hits-driven business, and since it is virtually impossible to sustain a near-perfect record of hits, it must also buy them.

The San Francisco company also has the resources to pull it off. Thanks to its IPO last year, it has $1.81 million billion in cash and no debt, and in January, it hired Barry Cottle from EA to head-up acquisitions and corporate development.

OMGPOP is a case in point: It developed a game called Draw Something, which was an instant sensation on iPhones and Android devices. Zynga paid more for the 40-employee company than it did for the past 22 acquisitions combined. Over the past year, it also tried aggressively to purchase both Rovio and PopCap, which ended up selling to Electronic Arts.

And now it’s telling the world that its purse strings are loosening.

“We’re sitting in a very advantageous position,” Cottle told Bloomberg. “We have a significant amount of cash, we have no debt, and we have access to debt to be as aggressive as we need to be.”

The credit firm cut long-term and short-term debt ratings by one notch. Moody’s also said its outlook was negative, meaning further downgrades are possible.

“While volatility by quarters is not uncommon, Moody’s believes that the structural challenges facing Nokia’s Mobile Phones segment may not be easy to address, such as the market share gains recorded by makers of very low-end phones or new phone promotions by Chinese carriers,” Moody’s said in a statement. “This precipitous decline is of particular concern considering that Nokia’s Mobile Phones segment was still the core income generator for the Nokia group in 2011, when it contributed 1.5 billion Euros to the group’s operating profit of 1.8 billion Euros.”

Moody’s also noted that the company’s shift from Symbian to Windows Phone-based devices “is proving more challenging than expected given that sales of Symbian-based devices are falling off very quickly while Lumia sales are only ramping up slowly.”

The ratings move follows Nokia’s warning last week that its business was weaker than expected and that it sees another rough quarter ahead. Nokia is slated to deliver its full earnings report on Thursday.

For its part, Nokia said it is “quickly taking action” to address concerns about its business.

“Nokia will continue to increase its focus on lowering the company’s cost structure, improving cash flow and maintaining a strong financial position,” CFO Timo Ihamuotil said in a statement.

Nokia was hit with downgrades last year after announcing its plans to focus on Windows Phone.

Moody’s did note that Nokia “has maintained a strong liquidity position and capital structure” and had about twice as much cash and marketable securities as it did debt as of the end of March.

The Kirkland, Wash., company had $698 million in cash and short-term investments on Sept. 30, and can afford to make the $237 million payment due Dec. 1. But it also needs to raise lots of money if it is to remain in business after the next 12 months.

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The cautionary statement, in a filing with the Securities and Exchange Commission, came as the company reported another drop in cash in for third quarter, even after it drew $160 million from its credit line.

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Monday, Standard & Poor’s warned that it could downgrade Sprint’s debt further into junk territory, citing the likelihood the carrier would spend more money than it takes in through 2013 and the potential for it to refinance its debt.

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