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TFA doesn't say it came due to a search for "strategic alternatives." It says "Dan Loeb's Third Point hedge fund in December urged Intel's board to explore "st

by gvb 6y ago

TFA doesn't say it came due to a search for "strategic alternatives." It says "Dan Loeb's Third Point hedge fund in December urged Intel's board to explore "strategic alternatives." That is typical hedge fund pressure attempting to squeeze (short term) money out of their investment. The article has two more paragraphs consisting of the hedge fund's cheap shot quotes. It isn't clear Intel's board succumbed to the hedge fund pressure. Changing the CEO from a finance-oriented CEO to a technically-oriented CEO (Gelsinger) is taking Intel back to its roots rather than "exploring strategic alternatives." Intel was founded and lead for many years by technically-oriented CEOs. Ref: https://en.wikipedia.org/wiki/Intel#Leadership_and_corporate_structure https://en.wikipedia.org/wiki/Intel#Leadership_and_corporate...

totalZero 6y ago
As far as Third Point's public commentary goes, you're right. [0] (Who knows what they said in private.) "Strategic alternatives" often means "split up the businesses." Silver Lake proposed something similar to AMD in 2015. In the end, the Silver Lake deal didn't happen [1] and AMD stock is up 45x since then. [0] https://www.yahoo.com/entertainment/third-point-full-letter-intel-220753103.html https://www.yahoo.com/entertainment/third-point-full-letter-... [1] https://www.extremetech.com/computing/215353-amd-talks-with-private-equity-firm-silver-lake-fell-through-report https://www.extremetech.com/computing/215353-amd-talks-with-...
- atniomn 6y ago
  Splitting up Intel's fabrication and design businesses would it make similar to AMD, the stock which is up 45x since 2015. Intel's fabrication business needs more volume, so it can increase R&D spending and capital expenditure, it can get this volume as a merchant fab. Intel's design business doesn't need to be held back by Intel's fabrication delays. I imagine designers at Intel would prefer to compete with AMD on the same playing field--TSMC's latest node.
  - totalZero 6y ago
    AMD chose to spin out GlobalFoundries in 2008, several years prior to the 2015 Silver Lake near-deal [0], becoming a fabless company on the tail end of a 90% slide in AMD stock. AMD share price continued to decline and remained in the low single digits for seven years after AMD and GlobalFoundries parted ways. My understanding is that Silver Lake wanted AMD to split apart its product segments. They were going to buy 20-25% of the company, but the deal never materialized. Intel's vertical integration is an asset IMO, especially in a supply-constrained environment like the present. [0]: https://www.eetimes.com/amd-foundry-spinoff-open-for-business/# https://www.eetimes.com/amd-foundry-spinoff-open-for-busines...
    - N1H1L 6y ago
      Yes. And GlobalFoundries has basically bowed out of leading edge nodes, saying they won't have the R&D or money to go below 12nm

by gvb 6y ago

totalZero 6y ago

As far as Third Point's public commentary goes, you're right. [0] (Who knows what they said in private.) "Strategic alternatives" often means "split up the businesses." Silver Lake proposed something similar to AMD in 2015. In the end, the Silver Lake deal didn't happen [1] and AMD stock is up 45x since then. [0] https://www.yahoo.com/entertainment/third-point-full-letter-intel-220753103.html https://www.yahoo.com/entertainment/third-point-full-letter-... [1] https://www.extremetech.com/computing/215353-amd-talks-with-private-equity-firm-silver-lake-fell-through-report https://www.extremetech.com/computing/215353-amd-talks-with-...

atniomn 6y ago
Splitting up Intel's fabrication and design businesses would it make similar to AMD, the stock which is up 45x since 2015. Intel's fabrication business needs more volume, so it can increase R&D spending and capital expenditure, it can get this volume as a merchant fab. Intel's design business doesn't need to be held back by Intel's fabrication delays. I imagine designers at Intel would prefer to compete with AMD on the same playing field--TSMC's latest node.
- totalZero 6y ago
  AMD chose to spin out GlobalFoundries in 2008, several years prior to the 2015 Silver Lake near-deal [0], becoming a fabless company on the tail end of a 90% slide in AMD stock. AMD share price continued to decline and remained in the low single digits for seven years after AMD and GlobalFoundries parted ways. My understanding is that Silver Lake wanted AMD to split apart its product segments. They were going to buy 20-25% of the company, but the deal never materialized. Intel's vertical integration is an asset IMO, especially in a supply-constrained environment like the present. [0]: https://www.eetimes.com/amd-foundry-spinoff-open-for-business/# https://www.eetimes.com/amd-foundry-spinoff-open-for-busines...
  - N1H1L 6y ago
    Yes. And GlobalFoundries has basically bowed out of leading edge nodes, saying they won't have the R&D or money to go below 12nm