By Benjamin Pimentel
SAN FRANCISCO (Dow Jones) -- Shares of Advanced Micro Devices
Inc. plunged nearly 9% Tuesday after the company said it needs more
votes for the approval of its planned major spin-off.
AMD fell 8.9% to $2.15 following the chip giant's announcement
that it is extending the period for soliciting votes for its
planned spin-off after failing to meet the required 50% quorum.
The company said only 42% of shares have been voted, with 97% in
favor of the creation of Foundry Co. AMD said it has postponed its
shareholder meeting on the issue to Feb. 18. in Austin, Tex.
AMD is spinning off its manufacturing facilities to form Foundry
Co. in a joint venture with Abu Dhabi's Advanced Technology
Investment Co. The bold plan was part of AMD's stated "asset-smart
strategy," which analysts have said would help AMD deal with
mounting financial burdens.
But analyst Brian Piccioni of BMO Capital markets said the newly
announced delay could mean that the Foundry deal is "in
jeopardy."
Analyst Roger Kay of Endpoint Technologies Associates also said
the company's failure to secure the need votes was bad news.
"AMD wants to see the deal done quickly for any number of
reasons, not the least of which are necessary capital and a sense
of stability so the company can continue operations," Kay said.