If you missed it, at the time of ARM’s IPO, Intel (along with other major investors) acquired a significant stake in the British company Arm. While the situation is tense in the blue (in the second quarter of 2024, Intel posted a loss of $1.6 billion, compared with a profit of $1.5 billion a year earlier), several choices have been made to satisfy the stock market and allow management to continue its strategy with a minimum of serenity. We have already mentioned the impact on employees and marketing, but in the last few hours, Intel has also divested its entire stake in ARM. The portfolio still represents 1.18 million shares, and the announcement was made official in the last few hours.
Let’s cut through the wild speculation right away: Intel is not selling the family jewels to pay the rent. Arm shares were introduced at $51, according to Marketwatch, and are currently worth $123. This operation will provide Intel with a profit line that could improve the cosmetics of its future financial results. It will also enable the company to cash in around US$145 million.
A capital gain on the counter and a signal to the stock market
From a stock market point of view, Intel’s pivot has been slow to take effect, making investors rather nervous. However, the Group’s strategy remains to scale up its contract foundry business. Intel CEO Pat Gelsinger believes that the next few months will prove him right, as the multiplication of investments has increased Intel’s costs and put pressure on profit margins, forcing it to seek cost reductions. For the sake of completeness, it should also be noted that even though Intel Intel has sold its Arm shares, the company has retained its other investments in companies such as Astera Labs, Joby Aviation, MariaDB and Senti Biosciences.
