Intel to Qualcomm: “We’re Not Dead (Yet)” – Apollo Waves $5B in Their Face

Well friends, it looks like Intel is telling Qualcomm to take their acquisition offer and shove it—for now, at least. Instead of calling it quits and letting Qualcomm pick at its bones, Intel’s getting cozy with Apollo Global Management, who’s apparently offering a sweet $5 billion lifeline. Because when you're circling the drain, who better to bail you out than a private equity firm famous for dumpster-diving in distressed assets?

(Source: PYMTS) 

In fact, you can almost hear Qualcomm muttering, “This could’ve been us,” while Intel winks at Apollo across the room, asking, “How much cash you got?”

(Source: Giphy) 

As we all know by now, this courting charade all started when Qualcomm, clearly in the mood to buy itself a struggling rival, came knocking on Intel’s door with a friendly little "I’m gonna be your daddy". Intel, however, seems to think they’re not quite ready to be taken behind the barn and shot just yet. Especially considering that while Qualcomm is hoping to make one of the biggest semiconductor mergers of all time, the FTC would rather eat glass than let a deal like that go through without some serious antitrust drama. 

(Source: Giphy) 

So that’s major hurdle #1. But say the merger flew through with flying colors, China would probably kill any progress of the acquisition whatsoever. After all, China’s been wrecking chip deals like it’s their job. Qualcomm’s NXP deal? Dead. Intel’s Tower Semi acquisition? Also dead. So yeah, it’s a dreadful uphill battle that Intel may be second guessing. 

(Source: Wired) 

Which is why when you throw in the fact that Intel has also been a walking disaster, a cash infusion from Apollo may seem like the best bet. But keep in mind, Intel’s stock is down more than 50% this year, and if that doesn’t scream "we’re in trouble," I don’t know what does. Despite CEO Pat Gelsinger’s best efforts to throw billions at a turnaround plan—because nothing says "we’re fixing this" like lighting money on fire—Intel’s still stumbling.

(Source: Giphy)

Gelsinger’s trying to rebuild Intel like it’s 1999, expanding production capacity and dreaming of advanced chips that’ll somehow bring them back to the top. Spoiler: It’s not working. Meanwhile, activist investors are circling like sharks, smelling blood in the water. And you know what happens when activist investors get involved: heads roll, and companies either shape up or get sold off for parts.

And that my friends, is where Apollo really comes in. Whereas, they are now offering Intel a $5 billion equity-like investment, because nothing says “I believe in you” like a giant pile of cash from a firm that specializes in distressed assets. Plus, Apollo’s been here before—they’ve already got a history with Intel, having dropped $11 billion on a chip-plant joint venture in Ireland earlier this year.

(Source: Reuters) 

So for Apollo, this is a classic “bet on the loser” move. They’re hoping Intel can pull a miracle out of its silicon-coated a$$ and stage a comeback. Meaning, if Intel takes the money, it gets to stay independent (for now), giving Gelsinger a bit more time to figure out how to save his job stop the ship from sinking.

(Source: Market Watch) 

But still, let’s be real here shall we? No matter how good it looks, a $5 billion adrenaline shot isn’t going to magically fix Intel’s problems. They’ve been bleeding market share to competitors like Taiwan Semiconductor Manufacturing Co. for years, and while Gelsinger’s out here making big promises, most analysts are sitting back with a bucket of popcorn, waiting for the inevitable crash and burn.

(Source: Giphy) 

So with Qualcomm's wet dreams of a merger and Apollo's massive burning pile of cash on the table, what’s next for Intel? Well, it’s no secret that the company has options, but none of them are particularly great. They can take Apollo’s money and keep stumbling along in their quest for a turnaround, or they can roll the dice with Qualcomm and prepare for a regulatory nightmare. Either way, Intel’s future looks about as stable as a crack head's last tooth. 

(Source: Giphy) 

In the end, it’s clear that Intel is definitely a hot commodity right now… and not in a good way. Only time will tell if the company can make its way back from clearance rack but given the fact that they’ve face planted on the AI craze (See: they’ve failed so badly, it’s almost impressive), the future still looks pretty dayum grim going forward.

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

P.S. On Thursday, we released an alert exclusively for our premium members, and by market close, the stock skyrocketed 140.45%. If you missed this one, don’t worry—you don’t have to miss the next. Another big opportunity is likely to drop this week. Click here to become a premium member and get in before the next stock takes off!

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