The Greatest Conglomerate Ever With the American Lottery

21. So, should I invest?

My head spun for a moment.

AMD?

“No, no, no, this is way over the line, even for a prayer bead.”

I’ve always been financially strapped, so my first PC after moving out was an assembled computer.

I started going to and from Dunawa, a famous PC site, to assemble cheap and good PCs, and once I assembled my own PC through various trials and errors, I gained some knowledge about computer parts.

That’s how I built my family’s SOMI computer and my father’s computer.

So, I knew what AMD, aka AMD, was all about.

Wasn’t it the company that seemed to be touted as the last stand against the Intel empire with the Athlon 64 in the 2000s, and then got pinched when Intel released Core 2, and then got pinched with its bulldozer or forklift architecture?

In Korea, it’s called amd because it makes your stomach explode and gives you cancer.

In Korea, it’s called AMD because it makes your stomach explode and gives you cancer.

And then to invest in a company that’s like the opening act in a movie?

Has the Buddha finally lost his mind?

But—.

No matter how much I racked my brains, there was only one conclusion.

How could I ignore something so bright and shiny?

“Ha ha! Damn it! Can’t you recommend a state that’s a little bit more prosperous?”

That’s bullsh*t, even for me.

There’s no way those stocks are cheap right now, much less likely to hit the jackpot.

Eventually, I picked up the intercom and paged John.

“You wanted to see me?”

“Yeah, have a seat there for a minute.”

“Okay.”

“If nothing else, what do you think about AMD?”

“What? Where?”

“AMD, I mean. Advanced Micro Devices, Inc.”

“…”

Instead of answering, John closed his mouth, blushing.

I bet one of my balls that he’s probably thinking to himself, What’s wrong with this crazy guy? I bet one of my balls he’s thinking.

“John?”

“Ha, I’m not thinking.”

“Huh? What do you mean you’re not thinking?”

“What’s the point of thinking about a company that’s already dead, so I don’t think about it.”

“…”

Well, that’s like treating me like I’m dead.

“Still, tell me what you know.”

“Why on earth are you asking?”

“I’m just interested.”

“No, of all the companies, why AMD?”

“No, just tell me.”

“Well, it’s a company that’s been there, done that. They’ve completely lost their competitive edge in the CPU market due to constant development failures. They had a brief resurgence with the bitcoin craze, but that was it. In 4Q14, they posted a net loss of $364 million and cut 7% of their workforce.”

“Huh?”

I said, not thinking.

“To top it off, they even shipped product to clear inventory for 2015, and now they have nothing to look forward to. They say they’re counting on new products coming out next year, but no one believes them.”

Sounds even worse than I thought.

“And, to top it all off! Moody’s, the credit rating agency, is about to issue a death sentence.”

“Moody’s is going to issue a death sentence?”

“It’s all over the place, and it’s probably true, that we’re going to be downgraded to CAA1, which is a non-investment grade, in December. Do you know what that means?”

“No, I’m not sure.”

“Junk! Junk! It’s a rating that makes it virtually impossible to repay the principal, which means we’re on the verge of default!”

“Hey, John.”

“Yes, boss.”

“Let’s not yell at each other. It makes John look like the boss, doesn’t it?”

“Sorry.”

“Hum, what about the manager?”

Is the manager going to be okay?

“Dr. Lisa Su has been president and CEO since October last year, and she’s been struggling.”

“What’s she like?”

“She has a PhD from MIT, was CTO of IBM and Freescale, which disappeared this year when it was acquired by NXP in the Netherlands. She has the best reputation in the industry, because even the people who still have a 0.1% hope for AMD believe in Dr. Lisa Su.”

“That’s great.”

Because I’m going to have to pin my hopes on that 0.1%, too.

“No! Why are you the only one who’s lucky!”

“Ai! Surprise!”

“Tell me, why are you the lucky one?”

“Well, because I’m pinning my hopes on that 0.1%, too.”

“No!”

“What? It’s my money, why not?”

“Still, no!”

“No, I mean, why?”

“I’m saying this is my last chance, and if I fail here, I have nowhere to go, so please help me, okay?”

“No, who said anything about killing you?”

“Isn’t that what it is, AMD from the first investment? Please don’t do this, boss!”

“…”

That’s it.

From nob le mt l. co m

John is about to cry outright now.

Heck, if the boss of the company I’d been told was my last chance at life was a lunatic, I’d feel hopeless too.

“Hey, John.”

“Yes, boss.”

“Just this once, listen to me. I’m taking AMD because I believe in them.”

“How about Nvidia, that’s my top pick, huh?”

“Well, I’ll take that as a priority, so let’s do both. Okay?”

“Are you sure you want to do that?”

“Yeah, I have a reason to invest, so just follow my lead this time.”

“Ha, how much are you willing to do?”

“Three hundred million dollars!”

The beads were unusually bright this time.

It was all or nothing.

“You’re only doing $100 million, right?”

“Three hundred million! No, John, didn’t you think I only had three hundred million in the first place? Even without the three hundred million, you’re investing another three hundred and fifty million?”

“So this is really the last time? Promise me you’ll never touch a junk grade again?”

“If AMD fails this time, I will.”

If this one fails, I don’t believe in prayer beads anyway.

“Okay, what do you want me to do?”

“Get me as much stock as you can for $300 million. I’ll leave it up to you, John, to figure out how to do that, whether you scrape it up in the market or buy it from an existing majority shareholder.”

“Got it, boss.”

I sighed after John left the room.

If only it weren’t so hard to invest like this with my own money.

“Beads, no, beads. You realize that if this slips off, I’m going to rip it off your hand, right?”

I feel like she’s whining, but I’m not sure.

She’ll figure it out if she wants to live.

As soon as John left my room, he dropped everything to Jennifer and Roy, and seemed to be immersed in securing AMD stock.

He was constantly on the phone, trying to figure out where he was, and he would leave and come back late at night.

It was frustrating, but I decided to trust him and wait.

In the afternoon of the second day, John knocked on my door.

“It’s me, boss,” he said.

“Come on in. You’ve been very busy lately.”

“hahahahaha, I’ve been busy fulfilling your orders.”

I was surprised to see him so energized, like a different person, after all his ranting and raving about not investing in AMD.

“So, what happened?”

“We’ve come up with a plan to get as much stock as possible. If the boss approves, we’ll start working on it tomorrow.”

“Ho-ho, you sound so confident.”

“hahahahaha, who am I, wasn’t I once a Wall Street legend?”

“…”

I didn’t realize it until now, but this guy is also a bit of a bad taste.

“Humph! Just kidding, the story went better than I expected. First of all, the largest shareholder has agreed to let us buy all of their shares.”

“Huh? Is that possible?”

“Yes, the largest shareholder is Mubadala Development Company, the capital of the United Arab Emirates. The company is wholly owned by the government of Abu Dhabi in the United Arab Emirates.”

“Oh, really? I thought there was a lot of talk in Korea about Intel being a shareholder?”

“hahahaha, how could that be?”

“Oh, really?

That rumor must have been true.

“Anyway, so what?”

“Well, Mubadala wanted to get out of AMD. They didn’t think it was viable, either, so when I reached out to them, they were really excited. hahahahaha!”

“So?”

“We agreed to buy all of Mubadala’s shares at $1 per share. That’s 141.9 million shares, so that’s $141.9 million, or a 15.3% stake.”

“Ohhhhh!”

A dollar a share?

The closing price today was $1.72 per share?

“How is that possible? That’s way below today’s closing price.”

“It’s a discount from Moody’s. They didn’t think there was any chance of a turnaround anyway, and they knew that Moody’s was going to downgrade it to total garbage sooner or later, so they sold it on the cheap when the company collapsed.”

“No. Can’t they sell it on the market?”

“All those shares? The moment you sell them, there’ll be a panic and you won’t even get an average selling price of $0.50, let alone $1. The majority shareholders won’t even be able to sell them on the market.”

“Oh, I see.”

Well, that’s great.

I’d only ever thought of buying it on the market for a pittance, but to buy it outright like this?

“You did a great job, John. I guess there’s a difference between a professional and a pro, hahahahaha!”

“hahahahaha, that’s it, there’s another one.”

“What else?”

“I had a consultation with Dr. Lisa Soo, and she’s pushing hard for an equity raise.”

“You mean a capital increase?”

“Yes. Apparently, the company is in dire straits. They had a CPU based on the ZEN architecture coming out next year, and they were confident that it would save the company, so they needed the money to finish it.”

“What did John think, did he think that ZEN or something was going to be successful?”

“I never thought I’d say this, coming from someone who was vehemently opposed to the investment, but I believe in Lisa Sue.”

“Oh, really?”

“She’s amazing. Her passion, her knowledge, I’m blown away. I’m telling you this, and I’m putting my name on it, a former Wall Street legend, AMD will come back from the dead.”

“No, after all the opposition?”

“I’m not a legend for nothing, because when I make a mistake, I admit it and fix it, right?”

“Puh-ha-ha!”

“hahahahaha!”

I’d been pushing for the AMD investment on a whim, and it felt good to have John come out so positive after two days.

“By the way, this rights offering thing, as far as I know, they don’t do third-party placements in the U.S., is that okay?”

“As you said, we do a lot of public offerings, but third-party allocations are not uncommon.”

“Then, as for the protective grace period, in Korea, there was also a rights issue?”

“There’s no such thing in the U.S. It’s something that’s required by the IPO or by the company or the investment bank, and it’s usually agreed upon, usually 90 to 180 days, and it’s not a legal requirement, and it’s not very common to have a rights offering at all, but of course it’s possible if it’s agreed upon.”

“Hmmm, so there’s nothing stopping you, then. Shall we invest?”

“Sure, boss!”

“How much?”

“You’ve agreed to spend $300 million, can we keep that, or better yet, spend another $50 million?”

“No, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no, no.”

“hahahahaha!”

“hahahahaha, okay, let’s do it!”

This is coming from a man possessed by a bead, a one-time junkie, and a Wall Street legend.

Of course I’m going, right?