Micro Turnout for Advanced Micro Devices

Last week, Advanced Micro Devices (NYSE: AMD  ) had to push back a special shareholder meeting because there weren't enough ballots cast to make any decisions, one way or another. Another week of voting later, the matter has been settled -- but just barely.

Why do I feel like some major shareholders might not know much about AMD's business?

Just the facts, man
Here are the facts of AMD's voting adventures as we know them:

 

Round 1

Round 2

Votes in favor

97.0%

95.0%

Votes cast

42.0%

50.26%

% of all shares in favor

40.7%

47.7%

Yep, voting 50.26% of the outstanding shares counts as a quorum, by the skin of the company's teeth. Another recount, and they might as well hold the next meeting in Florida or Minnesota.

Doing the math on the vote, it turns out that 15% of the new votes were cast against the proposal to spin off its chip manufacturing operations into a joint venture with the government of Abu Dhabi. That's hardly a ringing endorsement, when 97% of the original votes were in favor.

The naysayers doubled their vote count in the revoting round while those in favor only added a slight bump to the total. In the end, AMD got its way and can move ahead with the spinoff plan, but only 47.7% of its shares were cast in favor of the plan.

Nearly half of AMD's shares were eerily silent throughout the whole sordid opera. I don't get that at all.

If you own shares but don't like this radical change in AMD's business plan, you'd at least vote against the idea, right? And nobody would buy a substantial stake in a public company only to filibuster an important vote and potentially drive down the value of that large investment. So the only conclusion I can reach is that nearly half of AMD's shareholders either don't know enough about its business to make an informed decision, or that they just don't really care.

Either way, that scares me.

AMD's trouble is your buy-in window
AMD is fighting a never-ending uphill battle against chip giant Intel (Nasdaq: INTC  ) in the processor market, and a nonstop seesaw war against NVIDIA (Nasdaq: NVDA  ) in graphics chips and system platforms. The asset-light model pioneered by Texas Instruments (NYSE: TXN  ) looks less risky than the old way of funding those expensive manufacturing plants from a shaky balance sheet while relying on technology and manufacturing support from IBM (NYSE: IBM  ) .

Some purists disagree, complaining about stock dilution and lower margins. Well then, go ahead and vote "No"! I understand that AMD can be hard to keep track of if you haven't followed the company's story for very long. But if you don't know it, why do you own the stock? Knowing your investments is half the battle, and it looks like AMD's shares have fallen into the hands of the disinterested and/or the uninformed. Maybe that's what's keeping the share price so obscenely low. Feel free to agree or disagree in our CAPS community.

Further Foolishness:

Intel is a Motley Fool Inside Value selection. NVIDIA is a Motley Fool Stock Advisor pick. The Fool owns shares and covered calls of Intel. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Anders Bylund owns shares in AMD, but he holds no other position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (6) | Recommend This Article (6)

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  • Report this Comment On February 19, 2009, at 3:44 PM, SnarfJabroni wrote:

    The author Anders Bylund, a well-known inveterate AMD pumper since it was his sentimental first stock purchase ever....says:

    "Knowing your investments is half the battle, and it looks like AMD's shares have fallen into the hands of the disinterested and/or the uninformed. Maybe that's what's keeping the share price so obscenely low"

    "Obscenely low" is a relative term, now isn't it?

    Maybe the fact that AMD is printing about 100M new shares for Abu Dhabi, 60M at about $2/share, and 35M warrants at a PENNY a share...is what has driven the share price so "obscenely low"?

    Or maybe, shareholders don't like the fact that AMD is planning on spinning off all of their remaining tangible assets, you know, those things that comprise their enterprise value and subsequently, their share price and market cap...yet are retaining over $4B of their debt?

    Or maybe, it is the fact that AMD's merger with ATI has been an abject failure, and they have written off well more than half of the purchase price?

    Or maybe, it is because AMD has had 10 Q's in a row, of GUSHING losses?

    Or maybe, it is because AMD has over $5B of NEGATIVE retained earnings, NEGATIVE total stockholder equity, and NEGATIVE Net Tangible Assets? http://finance.yahoo.com/q/bs?s=AMD

    Hey, here's a thought...maybe your fellow AMD investors know precisely what is going on with AMD, and are either just hanging in there like YOU are, since you told them in April 2008 "Right now, AMD's stock is about as depressed as it will ever be, and a slew of impressive products is just now hitting sales channels" when it was trading at $6 http://www.fool.com/investing/value/2008/04/08/one-more-weak..., or they are NEW holders trying to catch a falling knife of a dying company.

    Ya think?

  • Report this Comment On February 19, 2009, at 4:55 PM, Brettze wrote:

    Will AMD still take Intel to court over anti trust issues? Why is it that I heard no more of that for past year... I contact investor relations at AMD and was told that it can be found in public records in NYC. Everything is clammed up. Maybe one day Intel will offer billions to have AMD shut up once for all.. Like Intel did with Sun Microsystems .. Mcnealy former CEO of Sun Micro was a howling mad lawsuit crazy dude until he got $7 billion from either Intel or Microsoft, I cannot recall. Anyway,,, again, why is AMD so clammed up about the upcoming court date with Intel if any... or is it dropped ?? If so, there should be an announcement by now.. I suspect that AMD is doing a dance around spooked out shareholders until the big day comes... Pennies from heaven!

  • Report this Comment On February 19, 2009, at 4:58 PM, Brettze wrote:

    Maybe that is why Intel is still falling in stock price to 12 now... Once Intel antes up to AMD, Intel will go up again, who knows.. Always happen all the times... AMD will have billioins to fool around with but will never regain market share anyway.. AMD will not even bother to share the loot with shareholders... AMD will elect to spend the billions developing new chips and keeping workers humming .. Shareholders will not see a dime ever again... Intel will have AMD creamed in ten years ..

  • Report this Comment On February 19, 2009, at 4:59 PM, Brettze wrote:

    That is why there is lack of interest in voting for AMD spin off of the Real Men's Fabs to the Middle East!! Good for Abu Dahabi where ever it is ..

  • Report this Comment On February 21, 2009, at 12:28 PM, snowfreeze wrote:

    Huh? What's not to love?

    Own a piece of a major computer processor manufacturer that is a huge thorn in the leg of stupid, I mean "intel". With that, own a piece of a major graphics processor manufacturer... All for less than the price of lunch at a fast food restaurant. What's not to love? You guys can go waste your money somewhere else (or invest it here).

  • Report this Comment On February 22, 2009, at 12:29 AM, snowfreeze wrote:

    Huh? What's not to love?

    Own a piece of a major computer processor manufacturer that is a huge thorn in the leg of stupid, I mean "intel". With that, own a piece of a major graphics processor manufacturer... All for less than the price of lunch at a fast food restaurant. What's not to love? You guys can go waste your money somewhere else (or invest it here).

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