Abu Dhabi State Fund Sells $842 Million in Advance Microprocessor Devices (AMD) Shares

Abu Dhabi’s state-owned investment fund, Mubadala Investment Co, has sold a large portion of its position in common equity shares at Advanced Micro Devices (AMD), Reuters reports.

Last week, AMD announced quarterly results that fell short on top line revenue. The company forecasted decent Q1 earnings but buried within the presentation the company indicated that an expected year over year decline of 24% will be primarily driven by lower graphics sales due to excess channel inventory and the absence of blockchain related GPU revenue plus lower memory sales.

AMD is a firm that rivals Intel Corp and Nvidia Corp in the manufacture of microprocessors/semiconductors used in cryptocurrency mining and data processing. AMD is not alone in being dinged by the decline in the crypto mining sector. Only recently, did AMD position its hardware to be more competitive, launching a page on its website touting its crypto/blockchain chops.

Mubadala also plans to convert 75 million AMD warrants it holds in the US company, whereby it will continue to be a major shareholder at AMD by continuing to own about 6.9 percent, down from the 12.9% stake it reported holding in 2017.

Though Mubadala did not disclose the price it obtained for the shares, according to Reuters, the market value of the 34.9 million shares on Monday was about $842 million.

According to a statement reportedly issued in Abu Dhabi, sale of the AMD warrants is expected to bring in $448.5 million.

Mubadala also reportedly holds shares in General Electric and private equity firm Carlyle Group, and first its bought AMD shares in 2007.

Profits are down globally at crypto mining firms as protracted crypto bear market of 2018 and now 2019 have placed substantial downward pressure on revenues and have forced many miners into foreclosure or contraction.
A company spokesperson for Mubadala, Brian Lott, told Reuters that Mubadala considered the AMD shares to have matured.

“Today’s transaction remains in line with Mubadala’s overall investment strategy to monetize mature holdings to deliver attractive commercial returns.

According to Reuters, Mubadala Investment Co manages a $225 billion portfolio on behalf of the UAE.
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