AMD
Alright, let me preface this by saying that I am brand new into this type of thing. I am trying out my hand at a little stock research, so I picked the fairly active/volatile stock AMD.
AMD bought ATI Tech in 2006 and at first it was receieved well by wall street and the price soared. However in 2007, AMD has been murdered by INTEL. A big reason for this is a rather controversial issue which involved INTEL handing Dell money (alledgedly) under the table in order to get intel into the computers. The bottom line is that intel has been very scrappy and been doing whatever it takes to get into manufacturers, and AMD is struggling on the marketing side even though its chips are said to outperform Intel's.
Right now there is very suspicious activity on the options spread, there is a gigantic volume of April puts, way higher than normal. Apparently this type of volume either means that a hedge fund is using a scare tactic to persuade people to sell stock, or that there is some sort of impending bad news on the horizon with AMD.
In addition, since AMD aquired ATI, goodwill of over $4b appeared on the balance sheets. This number is likely way too large and is inflating the assets of AMD because of the problems with its merger.
Even though AMD has been getting destroyed in 2007, I think it will get worse. If I was more confident in myself I would short it/buy puts.
So how did I do? I really dont know the lingo and would appreciate any insight into how I should be approaching this kind of thing.
-Jason
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