AMD’s biggest investor is selling 40 million shares of the company

Mubadala Investment’s move raises some questions, but share price remains steady.

Posted August 4th, 2017

Advanced Micro Devices’ largest shareholder sold off 40 million shares of the company on Friday. 

Based on the closing price of AMD on Thursday, this means Abu Dhabi-based Mubadala Investment Co. made $529.6 million off the sale. 

AMD’s stock price has more than quadrupled over the past two years.  Just since the start of this year its value increased 15 percent, driven by optimism over the release of competitive new computer and graphics processors.

AMD had been struggling with declining sales due to a slowdown in PC shipments and technological advances by its main competitors, Intel Corp. and Nvidia Corp.

Now AMD is seen as in a better competitive position with its new generation of chips.

RELATED: AMD’s turnaround has meant big money for key executives

This is the second time this year that Mubadala Investment has sold off a large batch of AMD shares. In March, Mubadala sold 45 million shares worth an estimated $613 million. 

Mubadala is not just some random hedge fund. It is a sovereign wealth fund -- an investment group-- linked to the Abu Dhabi government. It is also the owner of Global Foundries, and Global Foundries is important to AMD because it make the chips that the chip company designs. 

Mubadala’s decision to sell does raise some questions. Is the investment firm selling because its leaders believe AMD’s meteoric rise is coming to an end? Usually if you believe a stock will rise in the future, you hold on to it. 

Reuters News Service reports that Mubadala spokesman Brian Lott had this to say about the decision to sell: 

This is in line with Mubadala’s strategy as a financial investor with a long-term perspective, to optimize our shareholding in certain assets and monetize them at the appropriate time.”

The market itself isn’t panicking over this news. AMD’s stock price has remained near Thursday’s closing price all morning. 

And according to Reuters, Mubadala continues to be the largest shareholder in AMD, holding 57 million common shares and 75 million warrants, representing a 12.9 percent stake. 

AMD is one of Austin’s biggest tech employers, with 1,500 employees. The company is technically headquartered in California but most of its senior executives live and work in Austin.

-Reuters News Service contributed to this report