Viceroy Research, the company behind damning reports on Steinhoff and Capitec, has released a report on chip maker AMD.
Titled “AMD – The Obituary”, the report focuses on recent disclosures by CTS Labs which detail 13 vulnerabilities affecting AMD’s Ryzen and EPYC processors.
Viceroy is assumed to have shorted AMD’s stock, and that it stands to gain if the price of the stock declines.
“Make no mistake, the AMD growth story is dead,” said Viceroy.
“We believe AMD is worth $0.00 and will have no choice but to file for bankruptcy.”
AMD will have to recall chips
Viceroy also stated that AMD will have no choice but to recall chips affected by the vulnerabilities disclosed by CTS Labs.
AMD may issue patches to address the problems, but the issues are unpatchable, said Viceroy. It will take too long for AMD to build, test, and deploy patches, it said.
“The biggest hurdle Viceroy perceives is time. From discussions with experts: in the most optimistic of scenario it will take AMD many months to patch vulnerabilities on its devices.”
Viceroy believes that unless AMD finds a workaround instantly, a full recall in the interest of public safety will be necessary.
“The Product Safety Commission has the power to force cessation of sale and obtain orders for product recall if the product if deemed to present a substantial product hazard.”
Executives selling stock
To further substantiate its position, Viceroy said AMD’s management has been dumping their stock since November 2016.
“Since November 2016, AMD’s CEO, Lisa Su, has sold over 2.8 million shares of AMD, amounting to $30 million. In total, the management team has sold over 9 million shares of AMD since November 2016.”
Over the same period, there have been no announcement of insiders buying AMD stock.
Media outlets have highlighted the suspicious timing of the Viceroy report. Viceroy was able to release its report on the same day media reports of CTS Labs’ disclosures appeared online.
Viceroy’s report weighs in at 25 pages and covers the CTS Labs vulnerabilities in detail, while covering an earlier related AMD patch it said was unsuccessful.
It also covers insider trades and AMD’s product roadmap.
AMD’s stock price climbed to $12.00 yesterday before going down to $11.64. It is 1% up in after-hours trading.