Rumour has been on going for some time about a potential buy out of AMD. This coincides with the sudden change of management, starting with CEO Dirk Meyer, followed within weeks by COO Robert Rivet and Marty Seyer, senior VP for corporate strategy. This left the company without a leader. The search for replacements would take months before major decisions can be made.

So the rumour started in the industry that Dell was mentioned as a possible buyer. AMD shares traded up 4 percent for part of the day but closed down 3 cents during the regular session. Dell more or less shot down the rumor yesterday. During its earnings conference call, CEO Michael Dell, answering a question on acquisitions said “…we’re looking for relatively smaller sized ingredient acquisitions where we can leverage them with our substantial customer access and distribution.” With AMD currently trading at a valuation north of $6 billion with about $2.2 billion in long-term debt, it’s not the kind of target that would qualify as “smaller sized.”

To buy over AMD, the company needs to be careful with patents involving Intel. Secondly, AMD is 20 percent owned by Mubadala Development Company, the investment arm of the Arab Emirate of Abu Dhabi.

So, will there be a merger & acquisition deal for AMD ? It is too early to tell.