Intel sold its 1.18 million share stake in British chip designer Arm Holdings during the second quarter, according to a regulatory filing on Tuesday. This sale would have generated approximately $146.7 million, based on the average price of Arm’s stock between April and June, as per Reuters calculations. The sale aligns with Intel’s ongoing restructuring efforts, which include significant workforce reductions and the suspension of its dividend.
The company recently announced plans to cut over 15% of its workforce, as it faces challenges in the chip industry, particularly in the shift towards AI chips, where it lags behind competitors like Nvidia. Intel is focusing on developing advanced AI chips and expanding its for-hire manufacturing capabilities in an effort to regain its competitive edge, particularly against Taiwan’s TSMC, the world’s largest contract chipmaker. However, this strategic shift has increased Intel’s costs and pressured its profit margins, necessitating further cost-cutting measures.
Intel and Arm both declined to comment on the share sale. Benchmark Co analyst Cody Acree noted that the move appears consistent with the restructuring plan and the renewed focus on liquidity and efficiency outlined by Intel’s CEO, Pat Gelsinger. As of the end of June, Intel reported cash and cash equivalents of $11.29 billion and total current liabilities of about $32 billion.
Intel’s stock has faced significant challenges this year, losing more than 59% of its value. It dropped 26% on August 2 after the company suspended its dividend and remained nearly flat in extended trading on Tuesday.
Featured Image courtesy of Asharq Al-Awsat
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