In the darkest timeline a Dr. Lisa Su-less AMD would be 20 – 30% weaker. There’s no actual evidence for this, but it is scientific fact… all based on the result of a pricing analysis carried out on AMD’s stock price, using some referential peer-pricing maths over the period since Dr. Su took over the stewardship of the red team.
It’s an interesting thought experiment, taking the market pricing of three different semiconductor rivals who are effectively free from strong CEO leadership – IBM, Qualcomm, and Analog Devices. Using some typical forward financial metrics, Kwan-Chen Ma on Seeking Alpha has created some impressively accurate ‘fair value’ stock prices that match up very closely to the real-world valuations over the same timeframe.
Confident of its relative accuracy, he has then used the same approach to calculate the fair value stock price of AMD over the time of Lisa Su’s tenure based purely on financials and not on any effect that her presence might have had on the value of the company. The difference between the real-world and fair value pricing, he posits, is then the company’s “Lisa Su Premium.”
Dr. Lisa Su has been a very dynamic, and very visible, CEO for AMD. Her engineering background has helped her to steer the company in a very focused product-first direction, as well as drive it into smart, profitable areas it wasn’t previously working in. Admittedly those choices have all impacted even the fair value stock pricing the Seeking Alpha article is basing its findings on – the push into the semicustom market with the Sony and Microsoft consoles for one – which could mean her actual value to the company is even greater.
Without her at the helm the article concludes that the current share price would be around $23 – still a decent rise based given the engineering successes of EPYC and Ryzen – but that’s still 23% lower than the $30 valuation used when the article was written.
Kwan-Chem Ma acknowledges that this is probably a very oversimplified approach, and she’s not the only person within AMD responsible for its recent successes, but it does still indicate the company is outperforming where it might have been just taking the same pure product launches into account.
The driving force behind this report seems to have been the spurious rumour that Dr. Su would be leaving AMD to go back to IBM, a rumour she quashed almost immediately. But there has been other speculation about her moving on from AMD, with her hat even being thrown into the speculative ring around the Intel leadership position earlier in the year. Though that was more about people playing fantasy CEO league than anything based in reality.
Just for the record, zero truth to this rumor. I love @amd and the best is yet to come!
— Lisa Su (@LisaSu) August 6, 2019
There is the question as to why the comparisons weren’t made against Intel and Nvidia as AMD’s direct rivals, but the fact that Intel has been struggling for a leader for quite some time, and Jen-Hsun’s a pretty effective CEO in his own right, meant that neither would have worked as good peer-based control samples.
While the report does paint a picture of where AMD might have been without her leadership over this pivotal time in the company’s life, what we’re referring to as the darkest timeline potentially with a bearded Jim Anderson at the helm, it does also beg the question as to what would happen if she did move on.
At the moment there’s no need for her to leave what must be a pretty fun place to work right now, but no-one would be surprised to see a sharp AMD price crash if she ever did decide to take her CEO skillz elsewhere.
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