News Intel could be removed from Dow Jones due to stark stock price drop: Report

[Admin]

As Intel's market cap drops below $100 billion, the company's stock could be removed from the prestigious DJIA index.

Intel could be removed from Dow Jones due to stark stock price drop: Report : Read more

 

[Kondamin]

Market cap lower than their assets - debt, if that isn't a sign something is fundamentally wrong with the market I don't know what would be.

Maybe it's a good thing that they are out of the index as that would make them a far less interesting target for bots

 

[vanadiel007]

And there are still commenters who insist Intel is not going bankrupt.
Well, it's happening step by step in front of our eyes, if you follow the news.

They are in very serious trouble and will end up folding.

 

[Marlin1975]

And there are still commenters who insist Intel is not going bankrupt.
Well, it's happening step by step in front of our eyes, if you follow the news.

They are in very serious trouble and will end up folding.

I don't think they will go bankrupt. They would be bailed out or at least broken up and absorbed.

Their stock price is still to high and their manufacture side is still a mess with more broken promises everyday. "We're about to catch up... we promise the next node will not have problems..."

 

[Eximo]

An asset rich company. They can do a lot before needing to file for actual bankruptcy.

Selling Altera off seems to be top of the list at the moment.

 

[bit_user]

Market cap lower than their assets - debt, if that isn't a sign something is fundamentally wrong with the market I don't know what would be.

Stock prices are mostly based on belief in future performance.

Yeah, in the situation you describe, a private equity firm could theoretically acquire the company, strip it of its assets, then sell off the smoldering husk and walk away with a pocket full of cash. I'm not sure we're at that point, just yet. The assets on Intel's books aren't all so easy to unload and would depreciate in the time it took to do it.

An asset rich company. They can do a lot before needing to file for actual bankruptcy.

A lot of the assets they have are necessary for their business. Sure, they had some investments (many, for strategic reasons), but those are being unwound. For the majority of their assets, liquidating them would impact their revenues, since it'd mean closing fabs, R & D facilities, etc.

 

[JRStern]

Dow Jones has been obsolete for twenty years, everyone uses S&P500.

 

[Avro Arrow]

I'm actually surprised that Intel is even on the DJIA to begin with. I thought tech companies were all listed on the NASDAQ Index.

 

[bit_user]

I'm actually surprised that Intel is even on the DJIA to begin with. I thought tech companies were all listed on the NASDAQ Index.

The Dow Jones Industrial Average is an index of 30 large companies. I gather they're generally bellwether companies, though I'm not sure there's such a simple formula determining who gets admitted.

NASDAQ is an exchange, not an index. A comparable exchange would be NYSE. It's true that lots of tech companies (including Intel) are listed on NASDAQ.

I think a lot of mutual funds and other types of investors buy a certain share of the DJIA stocks, as a matter of course. If Intel gets dropped, expect their share price to immediately tumble at least a few points.

 

[Nyara]

Stock prices are mostly based on belief in future performance.

This is just partly true. Most investors for example agree that Intel will pick up in some 4-6 years from now. That is future, for example, yet, it is not affecting current stock prices.

Intel right now is diverting all profits (a whopping nearly 50% margin over a huge revenue base) into investment. It needs to, it is the correct movement, Intel 7 products aren't going to sell in the near future and production rate for the newer nodes needs massive investment, one that even TSMC is struggling to make and hence why 3nm is taking forever to pick up in production rate despite the astronomical investments.

The real issue why Intel stocks are this low is not due to future belief, but due current lost of trust in the current CEO, since he literally lied and hid information to investors three times in a row.

Normally, he would get immediately changed (and in fact is getting his butt heavily filled in demands), but a tech company in a tech roadblock in an investment crunch needs of somebody with the technological knowledge to navigate that problem, and that is Pat.

So the market is stuck with an Intel that has a CEO that cannot be trusted but cannot be changed for the time being, and everyone deeply hates that, and thus hates Intel stocks due the uncertainty that a CEO that cannot be trusted brings.

Investors are forcing him to reduce the spending and bring back dividends as soon as possible as a way to alleviate the uncertainty, alongside forcing him to make a plan that includes overseers to his work in the finances of the company. Stocks will remain very low until those demands are obeyed + Arrow/Lunar Lake sales starts showing up. And everyone meanwhile are debating if Pat will even follow through or not, hence the DJIA index questioning, among other things.

Pat might even be doing this intentionally to make stock crashes, as he is using all his wage to buy Intel stocks at the moment. He is also being demanded for market manipulation.

 

[bit_user]

Pat might even be doing this intentionally to make stock crashes, as he is using all his wage to buy Intel stocks at the moment. He is also being demanded for market manipulation.

This is not something you should idly speculate about. It would be hard for him to pull off such a heist (i.e. making unnecessary decisions that so greatly damage the share price), and any stock purchases he makes right now would get an incredible amount of scrutiny. If true, this is the kind of thing that can lead to jail time.

 

[Nyara]

This is not something you should idly speculate about. It would be hard for him to pull off such a heist (i.e. making unnecessary decisions that so greatly damage the share price), and any stock purchases he makes right now would get an incredible amount of scrutiny. If true, this is the kind of thing that can lead to jail time.

Oh, I am not speculating of anything, there is an ongoing demand (actually 3) for this specifically, we should presume innocence, but of course this kind of demands adds uncertianity, which makes stocks crash even further, specially when such demands were actually accepted to be investigated and not rejected on the first instance.

Point is that future expected performance is not the reasons investors are avoiding Intel, but it is the lose of trust in the CEO without having a reasonable replacement in the short term. Investors are requesting Pat to be more accountable, and recover trust through presenting instant benefits in resuming dividends, and the outcome of those requests is ? still.

Extremely awkward situation.

 

[bit_user]

Investors are requesting Pat to be more accountable, and recover trust through presenting instant benefits in resuming dividends, and the outcome of those requests is ? still.

I think that's what it's really about. It's investors who want their dividends, even if it comes at the expense of causing Intel's eventual demise.

When a company is losing money, I don't see how you can justify continued dividend payments. Sure, they supposedly have old profits they can draw down, but we all know those are an accounting fiction by this point. It's not an actual pile of funds they set aside, just for dividend payments.

 

[Nyara]

I think that's what it's really about. It's investors who want their dividends, even if it comes at the expense of causing Intel's eventual demise.

When a company is losing money, I don't see how you can justify continued dividend payments. Sure, they supposedly have old profits they can draw down, but we all know those are an accounting fiction by this point. It's not an actual pile of funds they set aside, just for dividend payments.

I agree that paying dividends now is a terrible idea (and I am an investor that would benefit) and I am with Pat that invest crunching is the way to go now, all technical reasons points that this is the only reasonable to do right now.

But Pat really messed it up with the foundry financial reporting, the Raptor Lake PR managing and a recent innacurate financial report, and investors are not trusting him right now to take away the dividend money (which were 10% the revenues.) I still trust in him personally, but he is not making it easy, for sure.

We are waiting to see what Pat will do to restore trust (he was forced to present an accountability plan in the coming weeks/months), and hopefully he does it in a way that does not deducts from the investment that Intel very much needs now.