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> 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
by MyOutfitIsVague 1y ago
> 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
> The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars
I don't understand. Can somebody explain to me how the government made an investement, bought shares, but paid nothing?
- heyheyhey 1y agoI think a better rephrasing is "government is giving $8.9B from the CHIPS act in exchange for a 10% stake in the company"
- tyg13 1y agoDepends on who you ask. Trump himself seems to think the US is getting 10% for free. I think that's a fair assessment given that these grants were already supposed to be paid out to Intel, without any kind of equity stake promised. Worth noting that Intel is the only company that had these kinds of shenanigans pulled with their grant. Samsung, TSMC, Micron and others were granted similar funds without any kind of withholding or demands for equity from the federal government.
- rvba 1y agoGetting stock in exchange of grants makes more sense than "pure" grants. This stock can later be sold, to benefit the taxpayer.
- behringer 1y agothat's not a grant. That's just buying stocks.
- BeetleB 1y agoIt's effectively a grant. The US government isn't buying existing shares. Intel is issuing new shares and selling them to the US government - so actual money is being transferred to Intel (and existing shares are being diluted as a result).
- MrDarcy 1y agoTrump feels Biden gave intel billions for nothing. Trump feels he’s balanced the scales by getting 10% of Intel. Trump gets to spin it as getting 10% of Intel for nothing. Win win for Trump.
- simoncion 1y ago> Worth noting that Intel is the only company that had these kinds of shenanigans pulled with their grant. Sure, but Intel's new CEO is making a lot of noise that indicates that Intel is maybe not going to be able/willing to build some-to-many of the things the CHIPS money paid for. Giving FedGov a 10% stake in the company [0] is better than taking the money back for nonperformance, wouldn't you say? [0] Which -as I understand it- was the sort of thing that was done for those finance companies that were Too Big To Fail when all that fraud^W novel financial engineering eventually caught up to them.
- dotancohen 1y ago> Depends on who you ask. Trump himself seems to think the US is getting 10% for free. I don't think anything is ever free, and I think that Donald Trump the businessman knows that better than I do.
- 01100011 1y ago> Worth noting that Intel is the only company that had these kinds of shenanigans pulled with their grant. So far...
- cvoss 1y agoThe answer is in the paragraph in between the two you quoted from. The money for the purchase has already been appropriated by Congress and awarded to Intel. The awards didn't previously have this giant string attached where Intel gives stock in return. But now they do. And it makes sense that Intel is spinning it as a generous investment from the gov't, but the gov't is spinning it as a free gift from Intel. Neither account really paints the full picture, but each one paints themselves as coming out ahead.
- MyOutfitIsVague 1y agoI had seen that, but I don't consider that "paying nothing". That's paying something. I'm also confused how it's a "grant" if it's completely transactional. That's not a string attached, that's just a purchase. So I guess it's just political spin on all sides.
- foota 1y agoThe thing you're missing is that it was different administrations offering the grant vs the "investment".
- reactordev 1y agoBoardroom politics... Everyone saves face.
- deleted 1y ago[deleted]
- m4rtink 1y agoIsn't that pretty bad, Darth Vader style changing of previously agreed on deals ? Not sure how anyone can believe anything that was agreed will hold in such an environment. :P
- tonetegeatinst 1y agoYes, but its semiconductor industry so its complicated. Intel got money via grants from the chip act and via other governments. Part of the reason they got that money was to help them build the chip fans in the USA and funding research and workforce in other nations. The fact Intel has claimed its slowing construction basically is a full 180° spin and will set them back in manufacturing ability. Previous CEO strategy was focused on heavy investment in catching up on manufacturing ability. But once you get stuck on a node it becomes expensive to catch up. New CEO is clearly trying to shed weight. They have let go of a significant % of workforce, stopped certain projects all together, and seem to be basically selling off parts of their technology and assets to keep cashflow positive. Given the current CEO and his history and connections, plus the US government involvement it looks like a rocky situation.
- colechristensen 1y ago[flagged]
- tobias3 1y agoIf someone from the Mafia comes to you and asks for a 10% share of your restaurant you better say yes.
- rcap5 1y agoSocializing a corporate venture with peace time debt seems counter to the ideals of free market capitalism. Even the takeover of "government motors" (GM) during the Great Recession left many concerned about government overreach. Boeing killed people with a bad product, and they only faced a fine without direct equity takeover.
- CoastalCoder 1y agoYes, but in this case the restaurant was already empty of customers on most evenings.
- Spooky23 1y agoAs long as there’s still cash, there’s plenty of stuff to loot.
- echoangle 1y agoSo then it’s fine?
- CoastalCoder 1y agoMy point was that Intel is already in need of rescue investment all on its own. I'm just pointing out a limitation of the Mafia analogy.
- miltonlost 1y agoBreaking into an empty locked building is still breaking and entering.
- ecocentrik 1y agoWhen you're really familiar with extortion, everything looks like an opportunity for extortion.
- mkoubaa 1y agoThey're nationalizing it
- usernomdeguerre 1y agoThe clearer picture comes from Reuters[0], as usual: >The government will purchase the 433.3 million shares with funding from the $5.7 billion in unpaid CHIPS Act grants and $3.2 billion awarded to Intel for the Secure Enclave program. So the same playbook hes taken across the board: cast aspersions on leadership, withhold duly appropriated money in contravention to the law. Rinse repeat. [0]: https://www.reuters.com/business/trump-says-intel-has-agreed-deal-us-take-10-equity-stake-2025-08-22/ https://www.reuters.com/business/trump-says-intel-has-agreed...