Intel Corp. (INTC) has sold its stake in Arm Holdings (ARM), a British chip firm, as part of its ongoing restructuring strategy. The move, revealed in a regulatory filing on Tuesday, sees Intel offloading 1.18 million shares in Arm Holdings, bringing in an estimated $146.7 million based on the average stock price between April and June.
This sale aligns with Intel’s restructuring plan, which prioritizes liquidity and efficiency, as CEO Pat Gelsinger outlined in a recent conference call. Intel is currently undergoing a significant restructuring, facing challenges from competitors like NVIDIA Corp. (NVDA) and Taiwan Semiconductor (TSM) in the data center semiconductor market. The company has announced a workforce reduction of over 15%, the suspension of its dividend, and a shift towards AI chips.
Despite these efforts, Intel’s stock has struggled this year, losing over 59% of its value. The company’s shares dropped 26% on August 2 following the dividend suspension.
Intel’s decision to sell its stake in Arm Holdings is part of a series of strategic moves aimed at revitalizing the company. Earlier this month, Intel postponed its annual “Innovation” event, initially scheduled for September, due to financial challenges and a CPU bug controversy. The event is now rescheduled for 2025.
Furthermore, Intel plans to cut 15% of its workforce, about 15,000 jobs, despite receiving $8.5 billion in government grants from the CHIPS and Science Act. This act, passed in August 2022, allocated $280 billion for science and technology research, with $52.7 billion earmarked for semiconductor development.
While facing challenges, some analysts see potential for a 36% upside in Intel’s stock, suggesting that the current downturn might present a unique buying opportunity.
Intel Corp’s stock closed at $20.47 on Tuesday, marking a significant gain of 5.73% for the day. However, the stock dipped slightly by 0.34% in after-hours trading. Year to date, Intel’s shares have experienced a substantial decline of 57.18%.
This sale of Arm Holdings shares signifies a significant move by Intel as it navigates its restructuring process and seeks to regain its position in the evolving technology landscape.
