Shares of Advanced Micro Devicesdropped 11% today after the company said lower prices would hurt its profit outlook. Subsequent downgrades from the major brokerages propelled AMD into becoming one of the most actively traded stocks today at the NYSE today. But there's more behind this precipitous drop than weak numbers. What's really going on? On today’s “Closing Bell” CNBC’s Silicon Valley Bureau Chief Jim Goldman found out.
AMD appears to be dealing with a double whammy today, not just from the bad financial news, but how the company disclosed it, said Goldman.
Here’s what happened. AMD Shares took it on the chin after yesterday’s late-night warning that revenue would be up about 3% sequentially, but profits and margins would take a beating because of the ongoing price war with rival Intel .
To make matters worse, AMD waited until 8 pm Eastern to release the news when most big tech investors were heading back from the big Consumer Electronics Show in Las Vegas.
As you might expect, support went south with downgrades today from Citigroup, Prudential, Morgan Stanley, and Bear Stearns.