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Didn't the US pay $9.8 billion? Intel's market cap is $106 billion, so $9.8 billion for 10% is buying at a slight discount. If that data is correct, how did t

Didn't the US pay $9.8 billion? Intel's market cap is $106 billion, so $9.8 billion for 10% is buying at a slight discount. If that data is correct, how did the US "extort" ownership? Look, I'm as terrified of Trump's overreach as the next guy. I could easily see him extorting partial ownership of companies. But I don't see this as being that. Can you make a convincing argument otherwise?

AnIrishDuck 1y ago
What was the legal basis for this "purchase"? Because as I understand it, Trump came in, saw a law he didn't like (CHIPS), and unilaterally "altered the deal" I don't think it's fair to characterize this as some kind of standard stock sale, as the terms were never set out as such from the start. (And to be fair, there are lots of valid criticisms of CHIPS) Instead, funding was voted for by Congress... and then a third party came in, threatened to kill it on a dubious legal basis, and extracted protection money (well, shares). That's textbook extortion.
davedx 1y ago
It was a grant (free money). Then the terms were (mostly) unilaterally changed to be an equity investment. Right?
- BeetleB 1y ago
  It was because Intel likely wasn't going to get the rest of the grant money, because Lip-Bu Tan openly told the world he won't develop 14A without commitments from customers. If Intel is going to cease semiconductor development, then why should they get the rest of the taxpayer money? Even under Biden and Pat Gelsinger, the government was signaling to Intel that they may not get the full money if they don't make progress.
- cpncrunch 1y ago
  No. It was a grant with profit sharing. The profit sharing was turned into equity. https://www.intc.com/news-events/press-releases/detail/1748/intel-and-trump-administration-reach-historic-agreement-to#:~:text=The%20existing%20claw%2Dback%20and,advances%20its%20U.S.%20investment%20plans. https://www.intc.com/news-events/press-releases/detail/1748/...
downrightmike 1y ago
All in so far it is $11.1 billion
jawiggins 1y ago
The US Government wanted companies to build fabs in the US so it offered them money to do it. Intel, which was one of those companies, but not the only one, took them up on the offer and was paid to begin construction on a fab in the US. Normally when we pay businesses to do things we don't demand equity stakes in the businesses afterwards. Notably, the biggest shareholders in Intel appear to be retirement funds of Americans - so Trump has just pilfered some money from the retirement accounts of Americans.

AnIrishDuck 1y ago

What was the legal basis for this "purchase"? Because as I understand it, Trump came in, saw a law he didn't like (CHIPS), and unilaterally "altered the deal" I don't think it's fair to characterize this as some kind of standard stock sale, as the terms were never set out as such from the start. (And to be fair, there are lots of valid criticisms of CHIPS) Instead, funding was voted for by Congress... and then a third party came in, threatened to kill it on a dubious legal basis, and extracted protection money (well, shares). That's textbook extortion.

davedx 1y ago

It was a grant (free money). Then the terms were (mostly) unilaterally changed to be an equity investment. Right?

BeetleB 1y ago
It was because Intel likely wasn't going to get the rest of the grant money, because Lip-Bu Tan openly told the world he won't develop 14A without commitments from customers. If Intel is going to cease semiconductor development, then why should they get the rest of the taxpayer money? Even under Biden and Pat Gelsinger, the government was signaling to Intel that they may not get the full money if they don't make progress.
cpncrunch 1y ago
No. It was a grant with profit sharing. The profit sharing was turned into equity. https://www.intc.com/news-events/press-releases/detail/1748/intel-and-trump-administration-reach-historic-agreement-to#:~:text=The%20existing%20claw%2Dback%20and,advances%20its%20U.S.%20investment%20plans. https://www.intc.com/news-events/press-releases/detail/1748/...

downrightmike 1y ago

All in so far it is $11.1 billion

jawiggins 1y ago

The US Government wanted companies to build fabs in the US so it offered them money to do it. Intel, which was one of those companies, but not the only one, took them up on the offer and was paid to begin construction on a fab in the US. Normally when we pay businesses to do things we don't demand equity stakes in the businesses afterwards. Notably, the biggest shareholders in Intel appear to be retirement funds of Americans - so Trump has just pilfered some money from the retirement accounts of Americans.