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Intel’s headquarters in Santa Clara, California.
Justin Sullivan / Getty Images
Intel
shares were bid in Tuesday’s trading after news emerged that Third Point activist investor Daniel Loeb had acquired a significant stake in the chipmaker, prompting him to explore strategic alternatives.
Shares were up a whopping 5.7% in afternoon trading after Reuters reported that Loeb’s hedge fund has a nearly $ 1 billion stake in the $ 200 billion company.
Loeb, who recently insisted on
Walt Disney
(DIS) In order to focus more on its streaming platform and permanently suspend its dividend, is urging Intel (ticker: INTC) to hire an investment advisor to help the chip maker determine whether it is a manufacturer of integrated devices should remain and whether he is a part of his recent acquisitions.
The activist investor added that it was crucial for Intel to retain customers such as Apple (AAPL),
Microsoft
(MSFT) and
Amazon.com
(AMZN) instead of allowing them to send their production abroad.
Intel has come under a lot of criticism in recent years as its market-leading role has been handed over to rivals like
Advanced Micro Devices (AMD),
Nvidia
(NVDA), and
Semiconductor manufacturing in Taiwan
(TSM). Intel’s stock is trading at about 10 times its expected earnings, making it look like defeated stocks like
General Electric (GE),
instead of its competitors, who trade up to 50 times earnings.
In a cover story last month, Barron’s detailed how Intel doesn’t deserve its low rating and that it has better days ahead.
In a statement Tuesday, Intel said it “welcomes input from all investors regarding improved shareholder value” and looks forward to partnering with Third Point.
Intel’s decline is a national security concern, Loeb wrote in a letter to Omar Ishrak, Intel’s chairman of the board.
“Without immediate change at Intel, we fear that US access to leading semiconductor supplies will erode, forcing the US to rely more heavily on a geopolitically unstable East Asia to power everything from PCs to data centers to critical infrastructure and more. provided, ”Loeb wrote.
Write to Carleton English at [email protected]