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Intel’s headquarters in Santa Clara, California.
Justin Sullivan / Getty Images
Intel
shares received a bid in Tuesday’s trading after news broke that activist investor Daniel Loeb of Third Point had acquired a significant stake in the chipmaker and insisted on exploring strategic alternatives.
Shares rose 5.7% in the afternoon trading after Reuters reported that Loeb’s hedge fund had a nearly $ 1 billion stake in the $ 200 billion company.
Loeb, who recently insisted on
Walt Disney
(DIS) to focus more on its streaming platform and suspend its dividend permanently, calls on Intel (ticker: INTC) to hire an investment advisor to help the chipmaker determine if it is an integrated manufacturer devices should remain and whether he of his recent acquisitions.
The activist investor added that it is crucial that Intel customers such as Apple (AAPL),
Microsoft
(MSFT), and
Amazon.com
(AMZN) rather than allow them to ship their production overseas.
Intel has come under a lot of criticism over the past few years for relinquishing its competitive role to such competitors
Advanced Micro Devices (AMD),
Nvidia
(NVDA), and
Taiwan Semiconductor Manufacturing
(TSM). Intel’s shares trade at about ten times the forward earnings, and it looks like squeezed stocks
General Electric (GE),
rather than its peers, who trade as much as 50 times earnings.
In a cover story last month, Barron’s explained how Intel does not deserve its low valuation and that it has better days ahead.
In a statement on Tuesday, Intel said it “welcomes input from all investors on the improved value of shareholders” and looks forward to entering into discussions with Third Point.
Intel’s deterioration raises concerns about national security, Loeb wrote in a letter to Omar Ishrak, chairman of Intel’s board.
“Without immediate change at Intel, we fear that America’s access to leading semiconductor supplies will erode, forcing the US to rely on a geopolitically unstable East Asia to power everything from computers to data centers to critical infrastructure and more. drives, “Loeb wrote.
Write to Carleton Engels by [email protected]