When business gets bad, some tech outfits will do whatever it takes to protect share prices, even it doesn’t add a bit of value to the company. We’ve seen two good examples of this in the last few weeks: Advanced Micro Devices, whose share price has tumbled following a series of bad quarters, gave the government of Abu Dhabi 8.1% of the company in exchange for $622 million in cash. Cisco, which is doing well, fr When business gets bad, some tech outfits will do whatever it takes to protect share prices, even it doesn’t add a bit of value to the company. We’ve seen two good examples of this in the last few weeks: Advanced Micro Devices, whose share price has tumbled following a series of bad quarters, gave the government of Abu Dhabi 8.1% of the company in exchange for $622 million in cash. Cisco, which is doing well, freaked the market with a warning that enterprise demand is softening, announced a $10 billion buyback of common stock. The buyback is in addition to $52 billion of previously authorized share repurchases.In AMD’s case the ploy didn’t work. Since announcing the Abu Dhabi deal on Nov. 16, the stock has shed nearly 15%. Sure, techs have taken a beating lately, but AMD’s tumble is far more severe and the stock is now trading at less than 50% of its 52-week high of $23 a share. There’s nothing wrong with borrowing money, but investors figure that the cash infusion isn’t much more than a Band-Aid covering a deep wound. AMD has been slugging it out with Intel, and the war has been very tough on the smaller company’s bottom line. I don’t think AMD is in danger of foundering any time soon, but Hector Ruiz and company need to do something fairly drastic before too long. There’s even been speculation (see Eric Savitz’s column in Barron’s for one view) that AMD might go fabless and let someone else build its chips. Others have speculated that the company might sell itself to graphics chip maker NVIDIA, but that’s not very well informed. Since AMD already owns the former ATI, there would obviously be serious anti-trust implications. Cisco is a different story, of course, but it’s worth noting that buybacks are not an unvarnished good. Remember, a company that buys back shares is generally buying back shares that were created by the issuance of stock options. That reduces the number of shares outstanding and thus raises the earnings per share (simple math) but changes nothing except the amount of cash on hand. No real value is created, and buybacks can disguise a number of problems. In an interview last year, Gary Lutin, a New York investment banker who gives advice in corporate control contests, likened such repurchases to a banker “giving away half of what’s in the bank vault then buying it back and telling all [his] depositors ‘That makes everything OK, right?’ ” (Lutin, a long-time source of mine, spoke during an interview with my former colleague at TheStreet.com Troy Wolverton.)Cisco got a short-lived bump after it announced the buyback, but shares subsequently gave up all the gains and are actually trading a bit lower than they were. Enjoy the rest of the holiday. I welcome your comments, suggestions and tips. Reach me at bill.snyder@sbcglobal.net Technology Industry