Tuesday, November 29, 2005

How media spins and twists for profit and fun

AMD's Spansion Memory Group subsidiary has posted 4 straight quarters of loss. The unit is being IPOed. On November 28, 2005, AMD filed Form 8-K/A, Item 7.01. Regulation FD Disclosure, in which it stated despite improving gross margins and increased utilization :"the Company expects the Memory Products Group to incur an operating loss in the fourth quarter of fiscal 2005".

Associated Press (AP) jumped on the news and wrote: "Advanced Micro Devices Inc., down 91 cents to close at $25.58. Losses are increasing for the chip maker's flash-memory unit ahead of the unit's initial public offering, the company said in a filing with the Securities and Exchange Commission." Then other media twisted it even more.

It's fortunate that Spansion will post a loss after all, no one expected it to post a profit. If it made profit and then goes IPO, the Wall Street crooks will all say AMD lost the profit engine and will fall hard.

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