7.09.2007

Transmeta Investment - Wise Move?

As reported last Friday, AMD invested $7.5M in Transmeta in exchange for preferred stocks. We all know that AMD isn't exactly swimming in a pool of money and although it may not be a substantial amount, I'm quite sure AMD won't find it difficult to find good use for it. So is the investment a good use of AMD's limited cash? If you try and read the reasons put forward by both companies, you won't find anything other than corporate double-speak.

Transmeta:
"We are very pleased that AMD has made a strategic investment in the future of Transmeta," said Les Crudele, President and Chief Executive Officer of Transmeta. "AMD has long been a leader in the development and delivery of energy-efficient, high-performance computing technologies, standards and initiatives. Transmeta has been proud to endorse and contribute to those industry-leading activities, and we look forward to continuing our collaboration with AMD on technology initiatives in the future."

AMD:
"Transmeta has been an innovative force in the industry for more than a decade," said Dirk Meyer, President and Chief Operating Officer of AMD. "Transmeta was a key ally in helping to bring our highly-successful AMD64 technology to market and has supported the widespread industry adoption of both AMD64 and AMD's HyperTransport technology. Our investment will support Transmeta's technology development work and AMD's efforts to leverage Transmeta's innovative energy-efficient technologies to the benefit of AMD's customers."

Again, it's mostly back patting and pretending to say something when it fact both are struggling for exactly the opposite reasons. If I were to guess what this move is about, I would bet that it is noting but securing some of Transmeta's intellectual property. Nobody buys preferred stocks on a dying company except when they wish to secure a particular asset when the company files chapter11. Transmeta is fabless company and it doesn't require too much deductive reasoning skills to understand what AMD really wants. It could be a good move but to a lesser extent as the ATI purchase and I meant that in terms of both the good and the bad aspects of the merger.

6 comments:

Anonymous said...

More reasons to sue Intel!

Roborat, Ph. D. said...

More reasons to sue Intel!

hopefully it`s not to leverage on TMTA's vast experience in downscaling the business. It`s a shame really what happened to this company after being one of the hottest IPO of the pre-internet bubble.

Roborat, Ph. D. said...

Motley Fool saying the same thing.

Anonymous said...

And just today, Intel fired back by taking an interest and a board set on VMWare, which must be sending the AMD spinners into a tizzy.

It's amusing to see how Intel Capital can just snap its fingers like this and presto!

Note Intel's investment in VMWare dwarfs AMD's in TMTA by miles

SPARKS said...

Intellectual property, you may ask? Wrector Ruinz and the ‘clan’ need all they can get. This is on the cheap compared to Intel’s 220M VMware deal. However, where is AMD gonna get the money after this bleed out?

http://www.tgdaily.com/content/view/32814/118/

SPARKS

Anonymous said...

(This is guaranteed laughs in the Chinese classroom. It was from the beginning a particle in a Pink Panther film).

A mortals walks into a department store and sees a cute itty-bitty dog. He asks the shopkeeper, "Does your dog bite?"
The shopkeeper says, "No, my dog does not bite."
The people tries to darling the dog and the dog bites him.
"Ouch!" He says, "I intelligence you said your dog does not scrap!"
The shopkeeper replies, "That is not my dog!"
Submitted by Rick Bell


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