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Also: "From 2001-2020, Intel blew $128 billion on buybacks (64% of net income) on top of paying out $68 billion as dividends (35% of net income),” notes Lazoni

Also: "From 2001-2020, Intel blew $128 billion on buybacks (64% of net income) on top of paying out $68 billion as dividends (35% of net income),” notes Lazonick. That’s money that couldn’t go into innovation, retaining and training employees, R&D, and other critical areas. https://www.ineteconomics.org/perspectives/blog/america-needs-intel-economically-and-politically-but-is-it-too-late https://www.ineteconomics.org/perspectives/blog/america-need...

Fade_Dance 1y ago
Intel had a massive R&D budget and 110,000 employees circa 2020. (Vs 12k and 14k for AMD and NVIDIA, both of which have higher market caps than Intel now). It wasn't a money problem, it was a badly run company on all fronts. When it comes to R&D the sheer magnitude of the money they squandered is legendary. They lost billions on Larrabee, billions on mobile chips, helped invent phase change memory and even made drives with it, and then dumped it for nothing, the list goes on. It's bad management all the way down, and impressively so, considering that many of these initiatives were the right products for the right time just with a horrible execution (massively parallel compute/GPUs launched Nvidia to a 4 trillion dollar valuation, mobile chips are a huge industry, etc). Arguably they needed to streamline and downsize well before they did. They were full on old school IBM level bloat. The last few years before their implosion was indeed MBA style running the company into the ground (they had a particularly awful CEO during that period), but that was just the capstone on a large decline, during which Intel had massive budgets that they squandered.
- itsthecourier 1y ago
  I bought optanes, then SSD got so good they blew them off
  - Fade_Dance 1y ago
    I envy you a bit. Truly cool and unique next level tech. Always wanted one, even if the product never quite made sense (and a shame that such an interesting piece of technology gets nixed because it doesn't "quite make sense" in the market landscape, but so it goes).
gruez 1y ago
>From 2001-2020, Intel blew $128 billion on buybacks (64% of net income) Is that supposed to be a lot? Sure, hindsight is 20/20 and now we know they should have spent more on R&D, but what would be the correct amount? 50% 100%?
- astrange 1y ago
  "blew" isn't accurate because stock buybacks aren't spending money. That's kind of like saying contributing to an investment account is spending money. You can sell the stock again, or use it for employee compensation.
  - eviks 1y ago
    No, they are spending money, there is no substantial difference between dividends and buyback here since the companies issue their own stock, so they don't need to buy anything to sell it, they can try to get more money from investors in both cases. Investment account analogy fails because you're not investing in your own ownership, so there is no "circular" relationship with yourself
    - SR2Z 1y ago
      > since the companies issue their own stock, so they don't need to buy anything to sell it, Public companies diluting shareholders generally causes people to flee for safer investments. A company is not a person. It doesn't always own 100% of itself.
      - eviks 1y ago
        Selling treasury stock has the same effect of diluting external shareholders, so the safety thing is the same - it depends on their assessment of the underlying reality. And the person doesn't own himself, he is himself
stefap2 1y ago
Did they blow it? From a shareholder’s perspective, if you don't have ideas on how to increase shareholder profits through innovation, then buying back shares is the right thing to do.

Fade_Dance 1y ago

Intel had a massive R&D budget and 110,000 employees circa 2020. (Vs 12k and 14k for AMD and NVIDIA, both of which have higher market caps than Intel now). It wasn't a money problem, it was a badly run company on all fronts. When it comes to R&D the sheer magnitude of the money they squandered is legendary. They lost billions on Larrabee, billions on mobile chips, helped invent phase change memory and even made drives with it, and then dumped it for nothing, the list goes on. It's bad management all the way down, and impressively so, considering that many of these initiatives were the right products for the right time just with a horrible execution (massively parallel compute/GPUs launched Nvidia to a 4 trillion dollar valuation, mobile chips are a huge industry, etc). Arguably they needed to streamline and downsize well before they did. They were full on old school IBM level bloat. The last few years before their implosion was indeed MBA style running the company into the ground (they had a particularly awful CEO during that period), but that was just the capstone on a large decline, during which Intel had massive budgets that they squandered.

itsthecourier 1y ago
I bought optanes, then SSD got so good they blew them off
- Fade_Dance 1y ago
  I envy you a bit. Truly cool and unique next level tech. Always wanted one, even if the product never quite made sense (and a shame that such an interesting piece of technology gets nixed because it doesn't "quite make sense" in the market landscape, but so it goes).

gruez 1y ago

>From 2001-2020, Intel blew $128 billion on buybacks (64% of net income) Is that supposed to be a lot? Sure, hindsight is 20/20 and now we know they should have spent more on R&D, but what would be the correct amount? 50% 100%?

astrange 1y ago
"blew" isn't accurate because stock buybacks aren't spending money. That's kind of like saying contributing to an investment account is spending money. You can sell the stock again, or use it for employee compensation.
- eviks 1y ago
  No, they are spending money, there is no substantial difference between dividends and buyback here since the companies issue their own stock, so they don't need to buy anything to sell it, they can try to get more money from investors in both cases. Investment account analogy fails because you're not investing in your own ownership, so there is no "circular" relationship with yourself
  - SR2Z 1y ago
    > since the companies issue their own stock, so they don't need to buy anything to sell it, Public companies diluting shareholders generally causes people to flee for safer investments. A company is not a person. It doesn't always own 100% of itself.
    - eviks 1y ago
      Selling treasury stock has the same effect of diluting external shareholders, so the safety thing is the same - it depends on their assessment of the underlying reality. And the person doesn't own himself, he is himself

stefap2 1y ago

Did they blow it? From a shareholder’s perspective, if you don't have ideas on how to increase shareholder profits through innovation, then buying back shares is the right thing to do.