Advanced Micro Devices Inc (AMD), the world's second-largest maker of computer processors, said it may sell up to US$700 million in new stock.
The company, which reported four consecutive quarterly losses, would use the proceeds to pay down debt, build new plants and equipment, or for other general corporate purposes, Sunnyvale, California-based AMD said in a filing with the US Securities and Exchange Commission on Thursday.
"We filed this to give us financial flexibility," AMD spokesman Drew Prairie said.
The company posted more than US$2 billion in net losses in the past four quarters, and analysts estimate it won't return to profit until 2009 as it struggles to keep pace with Intel Corp in the market for the main chips in personal computers.
Spending on a new plant, a US$5.4 billion acquisition and a price war with the semiconductor industry's richest company have hurt AMD's finances.
AMD's shares fell US$0.25 to US$12.45 in extended trading after rising US$0.42 to US$12.70 on Thursday on the New York Stock Exchange. The stock has declined 38 percent this year, giving the company a market value of US$7.04 billion.
Analysts do not think chief executive officer Hector Ruiz will deliver a profit until the first quarter of 2009, a Bloomberg survey showed. Ruiz obtained graphics chips through the purchase of ATI Technologies Inc, AMD's biggest acquisition, and said he wanted plants that could supply at least 30 percent of the processor market.
AMD had a 23.5 percent market share in the third quarter, little changed from a year earlier. Santa Clara, California-based Intel had the rest.
AMD ended the third quarter with US$1.53 billion in cash and marketable securities, a drop of US$66 million from the previous period. Some US$118 million of that total was in the form of shares of former affiliate Spansion Inc.
AMD sold a US$1.48 billion convertible bond in the third quarter. It used the proceeds and US$200 million in cash to repay a US$1.7 billion loan used to fund the ATI acquisition.
The company has US$1.9 billion in bonds due for repayment in 2012 and US$2.2 billion due in 2015. It had total liabilities of US$8.5 billion at the end of the third quarter.