U.S. government takes 10% stake in Intel

> the government made an $8.9 billion investment in Intel common stock, purchasing 433.3 million shares at a price of $20.47 per share, giving it a 10% stake in the company

> Of the total, $5.7 billion of the government funds will come from grants under the CHIPS Act that had been awarded but not paid, and $3.2 billion will come from separate government awards under a program to make secure chips

Interesting accounting there. I guess the government was threatening to void the grants or something? Why would Intel donate shares for grants already approved?

I guess this nets out to a stock issuance with no downward price pressure, so still not a bad trade for Intel if they thought those grants were worth nothing.

Because this clears the way to sell Intel Foundry and separate the chip design from the chip-manufacturing businesses completely.

The CHiPs act money had claw-backs such that if Intel sold the Foundry off they had to pay the government all the money back. This new deal waives all the clawbacks and says instead the Government gets warrants, good for five years, for 5% of the company at $20/share, good once they control less than 51% of the Foundry.

Ergo, the reason for the deal is that the board wants to sell off the Foundry, and didn't want to pay back the CHiPS act money.

Just another Trump shakedown. Nothing to see here.

It's extremely good business for the US. Trump doesn't get to take this with him.

Good context, thanks. If it’s likely that the Foundry will be sold off, do you view the extra 5% as a short-term profit and not really a geopolitical/strategic protection?

Seems the Foundry is the bit that USG really is trying to backstop.

Geez, they shouldn’t have downvoted you for expressing a positive viewpoint :/