Intel Soars +10% From "Strategic Options" Play (Seismic Comeback or Dead Cat Bounce?)...

In the midst of one of the most challenging periods in its 56-year history, Intel, the company that used to make headlines for its groundbreaking innovation is now making headlines for… well, not entirely collapsing. 

(Source: Giphy) 

In short, after a series of wild uncertainty, and criticism of the “has been” tech giant, Intel gave investors a nice little +10% surge last week that’s been hailed by some as a sign of life, and a stark comparison to the likes of throwing a defibrillator at a corpse and getting a twitch, to others. (aka me). 

(Source: The Information) 

The reason? Intel came out with news that they are considering to leverage some “strategic options”. That’s right, Intel is actually considering doing something about their company plummeting faster than a skydiver without a parachute- and while executives haven’t stated which direction they’ll ultimately turn to, rest assured they’re thinking really hard about them. Translation: “strategic options” is a phrase that’s about as meaningful as a New Year’s resolution—you know it's probably not going to amount to much, but it sounds good at the moment.

(Source: Giphy) 

As we all know, Intel’s stock has been on a downward spiral that makes the last season of Game of Thrones look like a masterclass in satisfying conclusions. The company recently reported a $1.61 billion net loss in the last quarter—a figure so ugly, it could make a drag queen blush. Additionally, they completely air balled EPS and revenue estimates by -80.25% and -1.14& during their last report, as their YoY numbers looked like a Wall Street Bet traders “Nvidia Loss P*rn”.

(Source: Reddit) 

For instance, despite revenue being down a bleak -0.9% YoY, net income, diluted EPS, and net profit margin have been a bloodbath plunging -208.71%, -208.57%, and -209.7%. Meaning, this dismal performance has dragged Intel’s stock down to levels not seen since 2013, back when we were all worried about the Mayan calendar ending, and “Harlem Shake” videos were clogging up our news feeds. 

Meanwhile, as Intel has become big techs version of “The Fall of Rome”,(down -53.89% YTD)  the rest of the semiconductor industryis living it’s best life, with the Philadelphia Stock Exchange Semiconductor Index and S&P Semiconductor ETF catapulting +33.08% YTD and +10.10% YTD, respectively. 

(Source: Moomoo Tech) 

So clearly, Intel has been the sad kid at the party this year, standing in the corner with a juice box while all of its competitors are taking turns doing the keg stand. 

Of course, CEO Pat Gelsinger is the man in the hot seat with all of this, and let’s just say it’s not getting any cooler. For instance, since taking the reins, Gelsinger’s been talking a big game about his IDM 2.0 strategy—a grand plan to bring Intel back to its former glory by doubling down on manufacturing and getting ahead of the competition.

(Source: Intel) 

But so far, this strategy looks more like a BuzzFeed listicle of “10 Things to Say As A New CEO to Get Investors Attention.” And with board members like Lip-Bu Tan (not to be confused with any member of the Wu-Tang Clan) hitting the eject button, it’s clear that even the folks at the top are starting to wonder if this ship can actually be steered away from the iceberg.

(Source: Giphy) 

However, as mentioned, the big news on the street is that Intel has come up with a plan as they’ve called in the corporate version of Plan B Contraception: Morgan Stanley and Goldman Sachs, to figure out what “strategic options” really are. According to reports, this could either end up becoming a merger with someone else, a splitting of the company into smaller segments, or selling off the cafeteria’s hot dog stand (kidding on the last part). 

(Source: CNBC) 

Again, we aren’t sure what the details are as of yet, but what we do know is that mere whiff of Intel possibly doing something—anything—was enough to get investors to stop doom scrolling for a minute and throw a few more bucks at the stock to have it rocket to a peak of +10% over the past five days. 

With that said though, no one’s expecting any decisions on the strategic options until the companies next board meeting this month. See: Throwing everything at the wall and see what sticks. In the meantime though, Intel’s got bigger problems to worry about—like how to reverse declining sales while also spending billions on R&D to keep up with rivals like Taiwan Semiconductor Manufacturing Co., and Dell Computers, which by the way, are currently eating Intel’s lunch.

(Source: Fortune) 

So given all of this, what’s the takeaway for investors this fine Sunday? Well in my personal opinion, Intels +10% surge over the past five trading days is a sugar rush - exciting for a minute, but ultimately unsustainable unless they can figure out how to actually turn things around.

Plus, with 32 analyst “Holds” and 5 “Sells” on the table (compared to one poor optimistic bastard's “Buy” rating), the outlook for Intel does not scream promising for the time being. 

(Source: TipRanks) 

But hey, at least they’re thinking about doing something, right? Because in the corporate world, sometimes the mere act of considering your options is enough to get people excited—even if those options are as vague and noncommittal as a politician’s campaign promises.

In the end, Intel is at a crossroads, and the decisions they make could either make or break the company going forward. So for now, while investors may see this +10% jump as a comeback, I’m going to trust my gut here and settle for a dead cat bounce. 

(Source: Giphy) 

On the other hand though, why worry about Intel when the last four of our Stocks.News alerts all exploded to peak moves of +110%, +185%, +110.10%, and +300%... in LESS than 48 hours?! Incredible right? Our premium members were absolutely eating last week, and with the market closed for Labor Day tomorrow, our next alert on Wednesday, September 4th is set to be even more explosive. 

Could it be another +100% or +300% move in the making? There’s only one way to find out. Meaning, if you’re not a premium member, then what the heck are you doing? Hurry and upgrade immediately to make sure you get in on next week's action!

In the meantime… stay safe and stay frosty, friends! Until next time…

Stocks.News holds positions in Dell and Intel as mentioned in the article.