Comment by robocat
Comment by robocat a day ago
So no shareholder vote required?
It is equivalent to a 10% dilution (shares issued for no extra cash).
Comment by robocat a day ago
So no shareholder vote required?
It is equivalent to a 10% dilution (shares issued for no extra cash).
How can this be any good for Intel? Why is the stock value bumping 6%?
The CHIPS grants had clawback provisions, which carry risk. This transaction removes that risk, so it's very good news for Intel.
> The existing claw-back and profit-sharing provisions associated with the government’s previously dispersed $2.2 billion grant to Intel under the CHIPS Act will be eliminated to create permanency of capital as the company advances its U.S. investment plans.
Because the government having a financial interest in Intel’s success is expected by the market to result in the government acting in Intel’s interest, in order to profit.
Government now has a vested interest in seeing Intel succeed. And as much as RW debate in bad faith about cutting public funding being good and private entities should pick up the slack etc. there is no bigger catalyst than government policy. Intel can now get preferential policies like bigger tax breaks/holidays, preferential treatment in government contracts, cheaper access to Federal land etc.
In the long term though, at least in hands of the government like the current admin, they will ensure Intel slows down innovation. They will push for every company in US to use Intel chips in one way or the other - national security and what not. Without competition companies often get complacent - not many can match the might of a government and US govt at that. So, yay for national security and nay for Intel becoming innovation powerhouse.
Intel is now a meme stock. The gamestop crew is getting in
It doesn't mean that.
Sometimes, there are returns on investments beyond what an accountant would calculate, but the investment only costs the same. Making stock priced only for normal returns a buy for beneficiaries of said additional returns.
In this case, reducing the risk associated with the imported chip supply.
No, the shares already existed, they were just held by Intel. According to their most recent 10-K, 10 billion shares of common stock are authorized, but only 4.33 billion were issued and outstanding.