Shareholders approve AMD's foundry spinoff gamble
It is perhaps the most colossal gamble in the history of the semiconductor industry, and now, the chips are down. AMD shareholders yesterday voiced their approval for a deal that effectively spins off the crown jewel of their company -- its processor foundry operation -- to a new corporation run by the government of Abu Dhabi in the UAE.
AMD will issue 58 million of its shares of common (not preferred) stock -- currently trading at $2.16 per share on the NYSE -- to Mubadala Development, along with a warrant to repurchase 35 million of those shares from Mubadala at a future date. Mubadala is an investor in the new Advanced Technology Investment Co. (ATIC), established by Abu Dhabi last October; and together, ATIC and AMD will co-own something that's still being called "The Foundry Company" (complete with quotation marks). And it'll be that company, whatever its final name ends up being, that operates the factories that will produce AMD's chips, and quite probably others' as well.