AMD forced to be more modest with Spansion IPO
Price target trimmed
AMD is feeling the pinch as tepid interest in its Spansion spinoff has forced a reduction in the IPO price range.
In a filing with the US Securities and Exchange Commission, AMD revealed a cut in the price range for the memory company IPO down from between $16 to $18 a share to between $13 and $14 a share. The Wall Street rumor mill pegged even the $13 target as ambitious with some saying a $12 per share target might be more likely. This is hardly the reception AMD was expecting.
Spansion looks to raise up to $493m in proceeds from the IPO.
By freeing itself of an up and down memory business, AMD's results should appear more consistent. The company has been taking market share from rival Intel, particularly in the server market and has enjoyed record processor revenues in recent quarters.
In addition, Intel may be less inclined to be as fiercely competitive on memory prices with Spansion as it was when AMD sold memory in-house. ®