SAN FRANCISCO A A report that Advanced Micro Devices Inc. was exploring its options lit up the chip maker’s stock in late trading, but investors might want to watch what happens first.
AMD (AMD) issued a statement after the market closed on Tuesday stating that it “is not actively pursuing a sale of the company or significant assets at this time.” Earlier, Reuters reported that the company had hired investment bank J.P. Morgan, a move that potentially could lead to a sale of the company or some of its assets. Read more about AMD’s statement.
The chip maker’s assertion that it was “not actively pursuing a sale” may be telling, because it could mean that it did already considered this option, or looked at the sale of some of its intellectual property, and decided against any such action.
It could be an acknowledgment that AMD would have a tough time finding a merger partner. The company’s biggest rival is Intel Corp. (INTC), the world’s largest microprocessor maker. Both companies are seen as behind in the mobile-device market — while their biggest partner, Microsoft Corp. (MSFT), embraced technology by rival ARM Holdings PLC (ARMH), by developing the new Surface tablet for its chip designs.
It’s not clear at all which company might actually want to acquire AMD. So investors who were cheering the potential of a merger or asset sale might want to rethink the whole scenario.
Source : Marketwatch