Well according to an article written by Viceroy titled “AMD – The Obituary” they seem all but certain of the doom of AMD. Read article here
Viceroy is a somewhat controversial financial firm that has in the past been suspected of releasing damning reports on companies. Why would they do that, you ask?
Well one can speculate that they short sell the stock of the companies. Viceroy Research has a financial interest in the stock price of a company going down when they hold a short position on the stock.
In a report they wrote pertaining to a South African bank, Capitec, they claimed the bank was operating like a loan shark. Read report here
While viceroy did not disclose if they held a position in the stock of Capitec, the stock price of the company fell nearly 20% after the report.
This is a snippet from the report they wrote on AMD:
“In light of CTS’s discoveries, the meteoric rise of AMD’s stock price now appears to be totally unjustified and entirely unsustainable. We believe AMD is worth $0.00 and will have no choice but to file for Chapter 11 (Bankruptcy) in order to effectively deal with the repercussions of recent discoveries.”
Well that sounds a bit like chicken little screaming about the sky is falling.
While many combed through the report after its release, it did not seem to have the desired effect on AMD’s stock price, in fact the price of the stock went up before market close on news of renewed interest in option activity.
So, why are they writing an obituary for AMD?
CTS labs, a cyber security research firm, released a whitepaper in which they describe in detail four classes of vulnerabilities in AMD’s new ZEN architecture chipset. Read whitepaper here
CTS labs came under fire when they stated that they sent their findings to AMD just one day before releasing the paper to the public. It is not unusual, but normally a company is given a lot more time to respond. What also made the public even more suspicious is that a half hour after the whitepaper was released by CTS Labs, viceroy published the “obituary” for AMD.
Could this all just have been a ploy to drive the stock price down so a few people could profit?
Well that is certainly not farfetched and definitely not something that has not been done before.
But what about the security flaws listed in the whitepaper?
AMD will certainly respond in the near future and let the public know of the credibility of the claims made by CTS Labs.
According to the whitepaper the security vulnerabilities are certainly worrying, however if true, AMD could issue patches to fix the flaws.
Intel has certainly seen its fair share of backlash for their recent string of issues with their chips.
After issuing several sets of patches the news has died down some, although there are still some in the tech industry with genuine concerns. Nevertheless, we live in a world dominated by Intel and AMD, to claim that either of these companies will see the grave any time soon is a bit over dramatic to say the least.
It is not new information that many tech companies have been tracking, collecting data and even have backdoors in them. We live in a new age of the digital revolution and many have quietly accepted the reality of a world with computer viruses, malwares and trojans, data tracking, data farming and even that our most private content is not private anymore.
That is not to say that AMD will not face backlash if the claims made by CTS Labs are true, I do tend to share a sentiment with this statement in the whitepaper they published: “In our opinion, the basic nature of some of these vulnerabilities amounts to complete disregard of fundamental security principles. This raises concerning questions regarding security practices, auditing, and quality controls at AMD.”
Regardless of the hype surrounding AMD’s vulnerabilities and stock manipulation, in any major tech company, especially those that design chips, there will be bugs. The companies will fix the issues or release patches as best they can or move on to a newer version. I still remember the days of Windows Vista, the only patch that could fix it was Windows 7.
There are many who seem to agree that the bugs issued in the whitepaper by the Tel Aviv based CTS Labs are genuine bugs. Dan Guido, of trail of Bits, tweeted “Regardless of the hype around the release, the bugs are real, accurately described in their technical report (which is not public afaik), and their exploit code works.”
Although, Linus Torvalds, creator of the Linux operating system, agrees that the bugs are genuine, he is annoyed at all the chaos surrounding the report. He even goes on to say “security people need to understand that they look like clowns because of it. The whole security industry needs to just admit that they have a lot of shit going on, and they should use — and encourage — some critical thinking.”
I wholeheartedly agree with that way of thinking. It is important for the computer user to understand that while we surround ourselves with the latest smart devices, they all have some level of flaws in them. We must accept that in a landscape where tech companies race against time to bring out their new tech before their competitors, some of them will end up being the Samsung Note 7 and some will be the next Windows 7 (when compared to Windows Vista).
Given time, AMD will address the flaws, although you need administrator’s privileges to exploit the flaws listed in the report. If someone has that level of access over your device, computer or server, then the flaws are the least of your worries.
No matter how advanced the tech, computer viruses, malware and other malicious programs are not going away. They advance with the tech we use.
So, was this a case of stock manipulation?
All the hype from viceroy research surrounding the whitepaper released by CTS Labs has a lot of the characteristics, but even with all the chaos caused, AMD’s doom is not coming anytime soon.