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TheMoosenator

TheMoosenator
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  • 3 Reasons AMD's Moat Is Getting Bigger [View article]
    Right, we can't count the 20% incremental revenue already announced for Q3. And clearly having 3/4ths of the game market targeted towards your GPU architecture is a disadvantage right? LOL.
    Oct 3, 2013. 09:17 AM | 2 Likes Like |Link to Comment
  • 'Mantle' Is The Most Interesting Announcement At Advanced Micro Devices' GPU14 Event [View article]
    Looks like AMD is really working to leverage their new position in consoles. Should be very interesting if "2018 hardware available today" is even remotely true. I would think that every game engine that wanted to be taken seriously would have to be coded to Mantle. When NVDA and AMD split the market (both console and PC) and the APIs were split (DirectX and OpenGL) there was less motivation to optimize for one or the other. But now that AMD will power roughly 3/4ths of each major title's unit sales with a single API how could you not use it?
    Sep 25, 2013. 11:13 PM | 1 Like Like |Link to Comment
  • All That Matters With Tesla [View article]
    I can think of one scenario that bonds may be converted for less money instead of sold into the market. Tesla paid $116M to several of the big banks for calls to prevent dilution. I would assume that those banks would hedge that position and I think the bonds themselves would make up part of that hedge. I would think that they would like to realize profits from that as early as possible so they would like to have the bonds converted sooner rather than later. I'm assuming that they crafted a hedge that makes them not much care what the underlying stock price is -- or at the very least is optimized around the conversion event (as evidence notice that the stock has been trading sideways at just the right price for the conversion event).

    So if these banks hold bonds they do not want to sell them because then they would have to continue to manage the risk of the calls they sold to Tesla. And they would not want to hold them because they probably have already gotten as much utility out of them as they can.

    What do you think?
    Sep 17, 2013. 10:11 AM | Likes Like |Link to Comment
  • All That Matters With Tesla [View article]
    Obviously if somebody were willing to pay that I would not convert! I just didn't expect it to trade over the stock price, thanks for the link on the bond pricing.

    When the bond was originally issued you were getting a $1k bond that paid 1.5% plus a 'free' leap call option (not quite free because 1.5% was probably 5% too low). They also make a nice hedge against a short.

    Now that the stock is above the conversion price (and especially once it is convertible) I was expecting it to trade for approximately the stock price + the net present value of the interest payments (a negative number). However as you point out there is a synthetic put at $125 in there and that seems to be worth quite a bit of money. So yes, thank you, I see now with both the call and the put that this can be considered a Leap option even above conversion price.

    So given the high price that the bonds are trading at it seems clear to me that the people buying them are using them as a hedge against a derivatives position -- long, short, or whatever. I was thinking buying the bond now was a long position (which it isn't) which would not make sense vs buying 9 shares and setting a stop.

    Thanks for the informative dialog.
    Sep 16, 2013. 03:51 PM | Likes Like |Link to Comment
  • All That Matters With Tesla [View article]
    @Gu Na

    Clearly since the rate was so very low that the bond buyers bought for the ability to convert. At some point they have to convert or they only get their 1.5% + $1000 back. Convertible bond buyers often hedge using a short position, their math may differ from yours.

    I disagree that these are like a leap option. You get no leverage, and not much of an option. I honestly don't understand why somebody would pay $1500 for a 'leap option' on 8 shares when they could buy the shares outright for $1324. Can you explain that?
    Sep 16, 2013. 10:34 AM | Likes Like |Link to Comment
  • All That Matters With Tesla [View article]
    I think you are reading that wrong. I read 20 non-consecutive days out of 30. So they only need 7 out of the next 11. If they miss that then the next opportunity would be the last 30 trading days of the year (Nov-Dec).

    I imagine that if the bonds become convertible they will be redeemed. No point in holding on for 1.5% when you can get a windfall profits right away. Convertible bond buyers often take out short positions to offset their risk (or vice versa). When they convert there is no selling pressure because they already sold short. Then there is the fact that TSLA bought the call option hedge. It would not surprise me if the call-option hedge counterparties are the holding many of the bonds.

    It will be interesting to see how this plays out over the next two weeks.
    Sep 13, 2013. 09:08 PM | 1 Like Like |Link to Comment
  • A Look Into Advanced Micro Devices' Debt [View article]
    Great idea, HSA foundation stock index. But then somebody would have to figure out who the mystery HSA foundation member is. Hmm...
    Aug 28, 2013. 11:08 PM | Likes Like |Link to Comment
  • A Look Into Advanced Micro Devices' Debt [View article]
    @typecheck: Goodwill has to be written down when accounting determines that it has to be written down -- PR is not involved. They have been carrying it a long time so I doubt they will have to write it down to $0 any time soon -- they may not have to write down any of it. But the point is that profit does not pay debt, cash does. If they have significant non-cash profit activity like a Goodwill write-off or capital depreciation widely different than capex, that does not alter their ability to pay off debt. Non-cash profits do not help them repay just as non-cash losses don't inhibit repaying.
    Aug 28, 2013. 01:02 AM | Likes Like |Link to Comment
  • A Look Into Advanced Micro Devices' Debt [View article]
    Great article, but one nit. Debt is paid off out of cash flow, not profit. Profit/loss contains both cash and non-cash items. Granted now that AMD does not own fabs there is less of a difference between cash generation and profit, but it is still an important distinction.

    As an example, AMD has enough Goodwill on their books that they could, if they wrote it down, make enough cash for the 2015 bonds yet show no net profit. Not that they would do that, but you get the point. It can also go the other way too.
    Aug 27, 2013. 10:41 AM | 1 Like Like |Link to Comment
  • Is Tesla's Drive Out Of Energy? [View article]
    Please show your math for point #1 -- your numbers don't make any sense. 43% of 70k is 30k. 10% per year depreciation of the car means it should be worth 50k after 3 years. Don't see how Tesla loses money on paying 30k for a 50k car. The buyer pays the other 40k (57%) plus interest.
    Aug 9, 2013. 01:40 PM | Likes Like |Link to Comment
  • KCAP Financial Inc declares $0.28 dividend [View news story]
    The news is actually the earnings: http://bit.ly/12Yis0C

    The $0.28 dividend 'announced' today via the earnings has already been paid.
    Aug 6, 2013. 03:58 PM | Likes Like |Link to Comment
  • Advanced Micro Devices: Some Serious Red Flags [View article]
    NVidia 'knows' GPUs but AMD only 'kinda knows' GPUs??? LOL.

    Discrete GPUs will die off just like discrete FPUs died off long ago. There is a huge cost and performance benefit to inclusion of features into the main chip -- once it is technically feasible. The market for discrete GPUs will decline to the point that it is no longer economically feasible to CHOOSE to keep making them. It is inevitable.

    When the GPU portion of discrete GPGPU no longer has a market then the GP portion will either be performed by the GPGPU portion of a CPU or it will be performed by an application specific processor (like a bitcoin mining ASIC).
    Jul 19, 2013. 03:20 PM | Likes Like |Link to Comment
  • Advanced Micro Devices: Some Serious Red Flags [View article]
    Graphics segment looks worse mainly because it keeps losing business to computational segment. In particular xbox profit is moving from graphics to computation. In the CC they pointed out that graphics sales improved but the royalties were down.

    So yes YoY looks bad but that is mainly behind them, things are improving going forward.

    Eventually discrete graphics will go to zero for both AMD and nVidia as it gets subsumed by SoC/APU. What is nVidia going to do then?
    Jul 19, 2013. 11:47 AM | 5 Likes Like |Link to Comment
  • Advanced Micro Devices, Inc. (AMD) CEO Discusses Q2 2013 Results - Earnings Call Transcript [View article]
    Except as they pointed out it does not require sales/marketing and a portion of the R&D is prepaid. So in the end the effective Gross Margin is higher than that.
    Jul 19, 2013. 02:19 AM | 1 Like Like |Link to Comment
  • AMD: Overvalued And May Raise Equity Capital [View article]
    Digihound, you overlooked one key fact. On the previous gen consoles and on the current Wii they were receiving a royalty (roughly revenue = profit) but not manufacturing the chips. For the PS4 and Xbox One they are manufacturing the chip (required by Intel cross license) and will be receiving a revenue of maybe $50-$80 with a profit of maybe $10. So the new consoles will contribute much more significantly in revenue and profit than the previous generations or the WiiU.
    Jul 15, 2013. 09:23 AM | Likes Like |Link to Comment
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