Shares of Transmeta (Nasdaq: TMTA) were up 20 cents, or 28 percent, to 90 cents on volume of nearly 8 million this morning, reeling from yesterday’s news of a multi-million dollar investment.Advanced Micro Devices Inc. (NYSE: AMD) invested $7.5 million in Transmeta in exchange for preferred stock, though the number of shares has not yet been released.
In a statement, Dirk Meyer, president and COO of AMD, labeled Transmeta a “key ally,” and said the investment will help drive AMD’s technology to the market, while assisting Transmeta’s technology development work.
“Transmeta has been an innovative force in the industry for more than a decade,” Meyer stated. “Our investment will support Transmeta’s technology development work and AMD’s efforts to leverage Transmeta’s innovative energy-efficient technologies to the benefit of AMD’s customers,” Meyer said.
The last few months have been rocky for Transmeta. In April the company announced its plan to focus on microprocessors rather than licensing its technologies and intellectual property after taking legal action against Intel for violating 10 of its patents; for the period ended March 31, 2007, the company announced a first-quarter loss of $18.7 million on sales of $2.1 million.
Cutting payroll and changing business direction are part of Transmeta’s previously announced restructuring efforts.
“In the first quarter of 2007 we made the difficult, but necessary, decision to reduce our spending by restructuring the company to focus on developing and licensing our technologies and intellectual property,” said Les Crudele, president and CEO of Transmeta, in a press release. “The restructuring is proceeding according to plan and, in some cases, is ahead of schedule. We expect to further reduce our headcount by 15 to 20 percent during the second quarter, mainly affecting general and administrative positions. As a result of the restructuring, we are no longer pursuing engineering services as a separate line of business and have also exited the business of selling microprocessor products.”
Shares of AMD were up 8 cents to $14.27 in Friday morning trading.
