34.9 million AMD share sale causes stock drop

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  • AMD stock falls 3.4%
  • Sale price not disclosed
  • 75 million warrants conversion will net AMD $448.5 million

Advanced Micro Devices Inc. (AMD) stocks fell by more than 3% yesterday after a share sell-off by Abu Dhabi’s Mubadala Investment, one of the company’s biggest investors.

Although it remains one of the chipmaker’s largest investors, the Abu Dhabi government-owned shareholder said it sold its stake in common shares and wants to turn 75 million warrants into equity shares.

The sale price was not disclosed by Mubadala, but the market value of the 34.9 million shares based on Monday’s closing stock price was around $842 million.

AMD stock fell by 2.18% in midday trading on the New York Stock Exchange to hit to $23.61. The loss follows three months that have seen the company’s shares rise by more than 21%, bucking the general sector trend that has seen the S&P 500 remain flat and the PHLX Semiconductor Index gain 5.3%

Mubadala said in a tweet: “We remain amongst the company’s top shareholders and are proud of our continuing partnership with AMD.”

The state fund also holds stock in General Electric Co. and private equity firm Carlyle Group.

When the warrants are converted into equity, a 6.9% stake in AMD will be held by Mubadala, which has been heavily spending in the company in the last decade. The planned conversion will mean $448.5 million is provided to AMD.

Mubadala Spokesman Brian Lott told the Abu Dhabi English news service: “Today’s transaction remains in line with Mubadala’s overall investment strategy to monetize mature holdings to deliver attractive commercial returns.”

“We are proud of our partnership with AMD and are confident in the management team’s ability to execute against their technology road map and deliver innovative products to the market,” he added.

Brian Ducey

Brian graduated from Chaminade High School and the University Of Vermont Kalkin School Of Business with a concentration in Finance. He began his career with Knight Capital Markets, working his way to market maker. Brian later expanded his market repertoire, working with various sell-side research brokerage firms, such as Sidoti & Co., and William O’Neill & Co., as an Account Executive. With over 20 years-experience in the financial industry, Brian has built a unique perspective into “market intelligence” understanding an ability to read the tape and apply second level thinking in a fast paced environment. Brian also carried several market licenses, including the series 7, 24, 55, 65, and 63 licenses as well as previously passing The Connecticut Life and Health Insurance Exam