AMD private equity buyout rumors gain momentum

— 11:26 AM on February 27, 2007

Rumors that AMD is the subject of buyout interest from private equity firms are gaining credibility, according to a report by ExtremeTech. The rumors are as of yet unconfirmed by either AMD or the unnamed private equity firms. Nevertheless, shareholders are taking the buyout talk seriously enough, and the site says AMD's stock price climbed more than 5% yesterday as a result. "There are rumors of a private equity buyout. At least in the near term, the options market is giving some credence to these rumors," an Interactive Brokers Group equity risk manager told ExtremeTech.

However, some suggest the rumors might be little more than wishful thinking. AMD's stock took a major dip after the company announced a $527 million operating loss in its fourth quarter earnings release a month ago. According to an FTN Midwest Securities analyst, the private equity buyout rumors "are borne of AMD's weak balance sheet."

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