Under-siege Intel quietly sells Arm stake as restructuring program continues

[midian182]

What just happened? Intel has sold its stake in chip design giant Arm amid one of Team Blue's biggest restructuring and cost-cutting pushes in decades. The sale of 1.18 million shares is likely to have raised $147 million for the company, which is currently dealing with a major crisis.

Intel sold off its Arm shares quietly; the only public acknowledgment of the sale was an update to its equity holdings disclosure (.PDF) in which the 1,176,470 shares in Arm Holdings were missing.

Intel posted weaker-than-expected quarterly results at the start of August: revenue was down 1% to $12.83 billion, missing analyst expectations of $12.94 billion. Chipzilla also revealed a $1.61 billion net loss and lowered its forecast for the current quarter. Shares fell 26% in a single day to their lowest point since 2013, making it the worst trading day for Intel since 1974.

The US tech giant has announced a $10 billion cost-reduction program that will see 15,000 employees, or around 13.6% of its workforce, laid off. It's also suspending its fiscal fourth-quarter dividend and plans to reduce capital expenditures.

Arm's share price has risen 96% since its IPO in September 2023. Selling the stake also means that Intel will lose the voting rights it had at Arm.

Arm's share price since its IPO

In addition to its disappointing financials, Intel is dealing with the Raptor Lake CPU stability issues that are proving to be a nightmare for the firm. There's also a class action investor lawsuit that claims the company lied about how well its foundry business was performing, and concerns over Intel's profitability have seen credit rating agency Moody's downgrade the company's senior unsecured rating to BAA1 from its earlier A3 rating. The financial problems resulted in Intel postponing its Innovation event from September until 2025.

Intel might be trying to raise more cash as it deals with one crisis after another, but it hasn't sold all its shares. It still has stakes in flying taxi firm Joby Aviation, AI/machine learning networking company Astera Labs, smart medicine maker Senti Biosciences, and open-source database developer MariaDB.

In what was more bad news for Intel, the recent Mercury Research report showed that its shares of the x86 desktop and laptop markets were being eroded by AMD. A situation that's likely to get worse due to the Raptor Lake problems.

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Under-siege Intel quietly sells Arm stake as restructuring program continues

 

[gamerk2]

Intels big advantage always used to be the combination of money it could throw into R&D, and the fact it could gain performance through its leading edge manufacturing division. Both those advantages have dried up, and Intel doesn't seem to know what to do about it.

I think the real problem is AMD was so far behind for so long (basically from the release of the original Core 2 all the way through AMD releasing Zen) where they stagnated, and have now fallen behind on their engineering in addition to their above problems.

Frankly, Intel needs new leadership top to bottom, and probably needs to re-design their CPU from the ground up to be able to better compete against AMD. I'd also argue at this point if their foundries aren't competitive and are as bad of a money sink as we've heard that it's time for Intel to go fabless and spin the division off (even if that would all but kill of American chip production; it's simply not cost justified for Intel).

 

[R00sT3R]

They must be really desperate, selling stuff to raise such a small amount (for a company of Intels size)

..it's pocket change to them in normal times.

 

[Burty117]

They must be really desperate, selling stuff to raise such a small amount (for a company of Intels size)

..it's pocket change to them in normal times.

Exactly what I was thinking, how bad has it gotten over there to need to raise such little money?

 

[i like foxes]

It s strange , I cant find many tests of Intel s microcode 0x129 impact vs initial BIOSes . I found some users are disappointed with the update - Intel default settings lower the raw performance by over 30% , VDD_CPU Voltage of i9 13900K hoveriing above 1.3V which is considered dangerous by the mobo itself . Windows getting unactivated (fixable I guess) I think Intel is in a pretty pickle ,

 

[LemmingO]

Intel will need to retreat and regroup. Whatever performance edge it had over AMD has gone. It's become an unreliable partner. It's no longer capable of cutting-edge manufacturing, and all because they simply chose to brush it under the carpet for so long.

They should take a deep long look at how AMD dealt with it.

Intel needs to have an open conversation with their investors and prepare them for the worst, otherwise it will be non-stop litigation.