UPDATE: AMD Shares Plunge On Delay Of Spin-Off Plan

By Benjamin Pimentel

SAN FRANCISCO (Dow Jones) -- Shares of Advanced Micro Devices Inc. plunged nearly 9% Tuesday after the company said it needs more votes for the approval of its planned major spin-off.

AMD fell 8.9% to $2.15 following the chip giant's announcement that it is extending the period for soliciting votes for its planned spin-off after failing to meet the required 50% quorum.

The company said only 42% of shares have been voted, with 97% in favor of the creation of Foundry Co. AMD said it has postponed its shareholder meeting on the issue to Feb. 18. in Austin, Tex.

AMD is spinning off its manufacturing facilities to form Foundry Co. in a joint venture with Abu Dhabi's Advanced Technology Investment Co. The bold plan was part of AMD's stated "asset-smart strategy," which analysts have said would help AMD deal with mounting financial burdens.

But analyst Brian Piccioni of BMO Capital markets said the newly announced delay could mean that the Foundry deal is "in jeopardy."

Analyst Roger Kay of Endpoint Technologies Associates also said the company's failure to secure the need votes was bad news.

"AMD wants to see the deal done quickly for any number of reasons, not the least of which are necessary capital and a sense of stability so the company can continue operations," Kay said.