> The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars
I don't understand. Can somebody explain to me how the government made an investement, bought shares, but paid nothing?
Worth noting that Intel is the only company that had these kinds of shenanigans pulled with their grant. Samsung, TSMC, Micron and others were granted similar funds without any kind of withholding or demands for equity from the federal government.
And it makes sense that Intel is spinning it as a generous investment from the gov't, but the gov't is spinning it as a free gift from Intel. Neither account really paints the full picture, but each one paints themselves as coming out ahead.
Everyone saves face.
Intel got money via grants from the chip act and via other governments. Part of the reason they got that money was to help them build the chip fans in the USA and funding research and workforce in other nations. The fact Intel has claimed its slowing construction basically is a full 180° spin and will set them back in manufacturing ability.
Previous CEO strategy was focused on heavy investment in catching up on manufacturing ability. But once you get stuck on a node it becomes expensive to catch up.
New CEO is clearly trying to shed weight. They have let go of a significant % of workforce, stopped certain projects all together, and seem to be basically selling off parts of their technology and assets to keep cashflow positive.
Given the current CEO and his history and connections, plus the US government involvement it looks like a rocky situation.
Sure, but Intel's new CEO is making a lot of noise that indicates that Intel is maybe not going to be able/willing to build some-to-many of the things the CHIPS money paid for.
Giving FedGov a 10% stake in the company [0] is better than taking the money back for nonperformance, wouldn't you say?
[0] Which -as I understand it- was the sort of thing that was done for those finance companies that were Too Big To Fail when all that fraud^W novel financial engineering eventually caught up to them.
> Depends on who you ask. Trump himself seems to think the US is getting 10% for free.
>The government will purchase the 433.3 million shares with funding from the $5.7 billion in unpaid CHIPS Act grants and $3.2 billion awarded to Intel for the Secure Enclave program.
So the same playbook hes taken across the board: cast aspersions on leadership, withhold duly appropriated money in contravention to the law. Rinse repeat.
[0]: https://www.reuters.com/business/trump-says-intel-has-agreed...
I'm just pointing out a limitation of the Mafia analogy.
Extortion.
Recent Supreme Court decisions have permitted the government to unilaterally cancel disbursements, even in flagrant violation of the plain text of law, impervious to preliminary injunctions, and then put up procedural hurdles to significantly increase the cost of reaching a final judgment in favor of the plaintiff. See, e.g., the most recent decisions issued this week in National Institutes of Health v. American Public Health Assn.: https://www.supremecourt.gov/opinions/relatingtoorders/24
So presumably the administration's deal was, give us what we ask for and you'll get the money Congress awarded, or don't and wait 1-2 years for any case to wind its way through the courts.
There has been some changing of deals on Intel's part as well, with indefinite delays on US fab buildouts the US passed a bill to subsidize. Now the US is taking some equity for its debt.
Far more dramatic Government intervention took place in 2009 when the US bailed out domestic automakers, including equity. Don't recall as much angst about that among the laptop class. Because Obama.
haha, is this the first you hear of this Trump guy? He rutinely breaks deals, like all the fucking time. (I get that this was not his deal, he breaks those too)
A deal with Trump is worth nothing.