Analyst sounds AMD cash-flow warning

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Analyst sounds AMD cash-flow warning


A US analyst has expressed "increasing concerns" that AMD is heading toward a cash-flow crisis even a shareholders' ears prick to whispers that a private equity company is looking to buy a stake in the chip maker - or even the whole kit and kaboodle. AMD's cash flow was questioned yesterday by American Technology Research analyst Doug Freeman, who told the firm's investor customers: "We were surprised to see AMD shares rally yesterday given what we believe to be increasing concerns about cash flow at the company... we think management will be forced to come to the capital markets for operating cash before the end of the summer."

AMD's shares yesterday opened at $14.83 and closed at the same price. During the day, the shares peaked at $15. The lift was due to the buyout rumour, Freeman said. "When we polled clients as to the reason behind the strength we were told that private equity rumors were circulating. While we do not doubt that private equity is sitting on cash it needs to put to work, we have a hard time seeing how it would get involved in AMD at the present valuation."