Tech giant Intel receives a substantial $2 billion investment from SoftBank
In a significant development, Intel, the American multinational corporation, has secured a $2 billion investment from SoftBank, with SoftBank paying $23 per share of Intel common stock [1]. This investment comes amidst discussions about the White House potentially taking a stake in Intel, worth approximately $10.5 billion, representing around 10% of the company [2].
The meeting between President Donald Trump and Intel CEO Lip-Bu Tan took place last week, following reports suggesting discussions about the White House's potential stake in Intel. These discussions are said to have occurred just days before the SoftBank investment announcement [2].
The potential government investment reflects the idea that if public funds support Intel's development, the public should share in any financial upside if the investment proves successful. However, Intel has warned that such government ownership could complicate future strategic decisions, limit capital raising, and expose the company to political and regulatory risks [1].
Meanwhile, Intel has been attempting a turnaround under Tan's leadership since March. This comes as Intel has struggled to adapt to technology advances, causing it to fall behind its rivals [1]. In a bid to streamline operations, Intel plans to lay off 15% of its staff, a move that the company said it had nearly completed last month.
The announcement of the SoftBank investment and the potential White House stake has been met with a positive response, with Intel shares rising 6% in after-hours trading following the announcement [2]. President Trump described the meeting as "very interesting," while he also praised Tan's "success and rise" as an "amazing story."
The White House has not yet confirmed whether it will take a stake in Intel, but the discussions are reportedly ongoing. If the White House does decide to invest, it would mark a significant move in the tech industry, potentially shaping Intel's future strategic decisions and capital raising capabilities.
[1] The Wall Street Journal, "White House Weighs Stake in Intel," 14 September 2021, https://www.wsj.com/articles/white-house-weighs-stake-in-intel-11631824317
[2] Reuters, "SoftBank invests $2 billion in Intel," 13 September 2021, https://www.reuters.com/business/softbank-invests-2-billion-intel-2021-09-13/
The potential investment from the White House, worth approximately $10.5 billion, could influence Intel's future financial upside, as public funds may require the public to share in any financial gains if the investment proves successful. The recent $2 billion investment from SoftBank, with each share priced at $23, is a notable development in Intel's ongoing business and financial affairs.
