SHOCKING! Intel Issues $17 Billion Minority Stake Sale to Stop the Bleeding...

Well it appears that Intel is on the hunt for some serious cash, and they’re not exactly being subtle about it. According to sources with their ears to the ground, the chipmaker is looking to offload a minority stake in Altera, their programmable chip making baby that they picked up in 2015 for a whopping $16.7 billion. Now, they’re hoping to score a deal that values the business around $17 billion. Yes, that’s an extra $300 million on top of what they paid. Inflation or "tech magic"? You decide.

(Source: CNBC) 

However, here’s where it gets really interesting:  Intel’s not just flirting with this whole “minority stake” thing. Word on the street is they’re open to letting go of a majority stake if the right investor comes along. Desperate times, desperate measures, right? And with Intel’s stock diving headlong into a 50% decline this year, I can’t blame them for looking to shake things up.

(Source: Giphy)  

But why the sudden change of heart on Altera though? Well first off, about a month ago, CEO Pat Gelsinger was all about how Altera was the future. You know, the usual corporate spiel about innovation and untapped potential justification. But as we all know, Intel is in trouble. Meaning with Nvidia absolutely ripping faces off in the AI chip race and AMD continuing to eat Intels lunch in the PC and data center markets - it ain’t lookin’ pretty folks. 

(Source: Benzinga 

Which is why when it comes to Altera, it's like a last-ditch effort to stay relevant. Meaning with Intel shopping round its programmable chips making unit to private equity and strategic investors, they’re hoping to bring in a few billion to stabilize the ship. So yeah, a cash infusion would definitely help… especially for shareholders who have been wiping their tears with Intel’s gut-wrenching losses this year. 

(Source: Reddit) 

On the other hand though, selling a slice of Altera isn’t solely just about keeping the lights on at Intel. Gelsinger and his team are banking on this sale to help fund their ambitious semiconductor fabrication plans. They’re hoping investors will see this as a bold move to secure Intel’s future as an independent company. And sure, maybe it is. 

But, but, but… this sale also comes at a time when Qualcomm has been circling Intel like a friggin vulture. Rumor has it they’ve got their eyes on Altera too. But let’s be clear—if Qualcomm swoops in and tries to snag Altera, it’s going to trigger all kinds of regulatory scrutiny. And we all know how much fun that can be. Especially as Intel is feeling heat with a security review in China.

(Source: Light Reading) 

So with all that said, if a perfect world appears for Intel with this Altera sale, can they turn it around? Maybe. But if this Altera deal doesn’t go through, or if they end up selling a majority stake and losing control, Intel could be in for even more carnage in the future. 

Notably, investors seem cautiously optimistic, though. Intel’s stock was up 1% after news of the potential sale broke. But let’s not get all horned up here (except for you degenerate “BTFD” guys), the stock is still plummeting left, right, and twice on Sunday when it comes to the long-term. And that’s some serious baggage they’ll have to maneuver. 

(Source: Giphy) 

In the meantime, we’ll be watching to see if Intel can pull off this high-wire act, sell a chunk of Altera, and still manage to keep its head above water. As always, stay safe and stay frosty, friends! Until next time…

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