Intel (INTC) shares are up barely in premarket trading on the late Friday information the US authorities is taking a 10% stake in the chip giant.
The deal is getting largely favorable critiques on the Street, in half because the authorities is not getting a board seat and the phrases aren’t tremendous restrictive.
Even still, it’s not an superb state of affairs for Intel. Now CEO Lip-Bu Tan has to have the Trump administration respiratory down his neck at every nook while he makes an attempt to save the company.
And make no mistake, with this authorities investment, it’s a signal that Intel wants saving.
What KeyBanc had to say:
“We see positive implications associated with this transaction as we were previously concerned that the U.S. government’s equity stake would likely have other Intel obligations with a potentially activist ownership role. Additionally, with the removal of the clawback on the previous CHIPS Act grant and announced equity transaction, uncertainty associated with whether INTC’s Chips Act funding would be reneged is off the table.”
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