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Intel’s headquarters in Santa Clara, California.
Justin Sullivan / Getty Images
Intel
The shares reached a bid in trading on Tuesday after news broke that Third Point activist investor Daniel Loeb had acquired a significant stake in the chip maker and was pushing it to explore strategic alternatives.
Shares rose to 5.7% in the afternoon trading after Reuters reported that Loeb’s hedge fund has a stake of about $ 1 billion in the $ 200 billion company.
Loeb, who recently pushed
Walt Disney
(DIS) to focus more on its transmission platform and permanently suspend its dividend, urges Intel (ticker: INTC) to hire an investment advisor to help the chip maker determine if it should remain a manufacturer of integrated devices and whether to divest some of its recent acquisitions.
The activist investor added that it was crucial for Intel to keep customers like Apple (AAPL),
Microsoft
(MSFT) i
Amazon.com
(AMZN) instead of allowing them to ship their manufacture overseas.
Intel has faced a lot of criticism in recent years, as its leading role in the market has given way to rivals such as
Advanced Micro Devices (AMD),
Nvidia
(NVDA) i
Taiwan semiconductor manufacturing
(TSM). Intel shares are trading about ten times in advanced earnings, making it look like outdated stocks like
General Electric (GE),
instead of their peers, who trade up to 50 times their earnings.
In a cover story last month, De Barron detailed how Intel does not deserve its low valuation and that it has better days ahead.
In a statement Tuesday, Intel said it “welcomes the contribution of all investors in terms of improved shareholder value” and hoped to engage with Third Point.
Loeb wrote in a letter to Omar Ishrak, Intel’s chairman of the board.
“With no immediate changes to Intel, we fear that America’s access to cutting-edge semiconductor supply will erode, forcing the United States to rely more on a geopolitically unstable East Asia to power everything from PCs to data centers to critical infrastructure and more, ”Loeb wrote.
Write to Carleton English to [email protected]