News Intel looks set to receive multibillion-dollar 'equity-like' investment from alternative asset manager Apollo Global Management Inc

[Admin]

Intel has been offered a serious cash injection from Apollo Global Management Inc., reports Bloomberg. According to the business-focused publication, and its people familiar with the matter, Intel could receive a multibillion-dollar equity-like investment from Apollo.

Intel looks set to receive multibillion-dollar 'equity-like' investment from alternative asset manager Apollo Global Management Inc : Read more

 

[Marlin1975]

I do not see this as a good thing.

Is intel really that hard for cash right now? What do they see internally that makes them think revenue, esp profit, will be dropping so much they need billions to keep the lights on while their "turn-around" is coming to fruition?

 

[rm12]

So, Intel already sold a 11 billion stake, now 5 additional. What will Intel own in the end own? And much rent could this still generate for Intel?

 

[Amdlova]

War machine... They will have money from. All sources.

 

[JRStern]

It depends on the terms.
"equity-like" generally means a convertible bond or a new preferred class of stock, it's not rocket surgery.
Or even a new issue of a hundred million new common shares.
Or some combination thereof.
Intel's sudden surge in capex around the world was always unsupportable without huge subsidies and probably excessive even with them, if Intel didn't have a care in the world the capex surge was going to be crazy trouble.
IOW, existing shareholders, watch out, these kinds of things often dilute the value of old shares.
I'm not really sure Intel needs this, cutting back some of these crazy plans or postponing them by several years may be better, cheaper, and easier.

 

[acadia11]

Intel is too big to fail. It would be purchased by another player and has far too much IP and assets to not turn around or exists as stalwart for sometime. As to whether Intel needs to the money or not, is irrelevant, they are an unfocused behemoth who was the GMC and Ford of the tech world. With that said they needed streamline and focus and start cutting their teeth on the new world we all live in. And this seems to be the direction they are headed now while they still dominant the desktop and laptop market these markets are shrinking ... so the question is how do they expand in the right new territories. I think they have it right with their foundry ideas as TSMC and Samsung can not handle all of the demand of our hyper-connected, cyber trope, that is and will be and the shaping of silicon required to make it so.

 

[TheSecondPower]

AMD in the past sold its office buildings to investors and started leasing the same buildings. Was it the best investment for AMD? Essentially it was the opposite of an investment and is costing AMD today. But on the other hand, it gave AMD the last little bit of cash needed to keep the lights on until Zen launched, and Zen was a very successful investment and its derivatives are AMD's bread and butter today.

Somehow I don't think Qualcomm could buy Intel design and keep the x86 license. But Qualcomm was mentioned as an Intel Foundry Services customer a while back and I'm sure Qualcomm would love to have a stake in the foundries it uses. And for regulatory approval, two US companies sharing IFS is no worse than one owning it.

 

[ezst036]

Is Apollo one of those "vulture" investment firms?

 

[NinoPino]

Is it possible that behind Apollo there is the US government trying to save Intel using pubblic money ?

 

[helper800]

Is it possible that behind Apollo there is the US government trying to save Intel using pubblic money ?

No.

 

[Eximo]

AMD in the past sold its office buildings to investors and started leasing the same buildings. Was it the best investment for AMD? Essentially it was the opposite of an investment and is costing AMD today.

Extremely common amongst large corporations. You sell the assets to a holding company or even outright sell and lease the facilities from the new owner. If you decide to close or move a location, you no longer have to sell it. Finding a new tenant no longer your problem. Also common to do this with furniture and other business necessities. Lease your generators, fridges, microwaves, coffee machines (or get a vendor in), phone and network equipment. Own nothing so that closing or opening a location is as easy as ending your contracts. On going cost, but more flexible.

Also the nepotistic side of it. Get some investors, offer to buy out a companies' assets and do a long term lease agreement. These kinds of deals often originate from the inside of a company for kickbacks. Though I have also seen the opposite happen. A large corporation that owns old facilities renting them out or doing co-ops with suppliers.

 

[sjkpublic]

Such sadness. Upper management failures. Middle management failures. Combined are taking a heavy toll. US gov contract money is like throwing money into a fire.

 

[AkroZ]

I do not see this as a good thing.

Is intel really that hard for cash right now? What do they see internally that makes them think revenue, esp profit, will be dropping so much they need billions to keep the lights on while their "turn-around" is coming to fruition?

It's not about what they think, it's what happens when you take a lease and you can't reimburse. Money doesn't grow on trees, Intel have debts, which means contracts with conditions and whats happens when you can't meet them.
The actions of Intel show that they have a hard line and current projections are below, this is a all feast banquet for who kwown exactly what the hard line is.

 

[dalek1234]

Intel is too big to fail. It would be purchased by another player ...

But isn't that how large corporations often fail, somebody buys them for a bargain basement price?

 

[gg83]

I do not see this as a good thing.

Is intel really that hard for cash right now? What do they see internally that makes them think revenue, esp profit, will be dropping so much they need billions to keep the lights on while their "turn-around" is coming to fruition?

I find it all surprising too. Maybe it's a ploy to destroy investors confidence so Black Rock can buy a majority stake.

 

[acadia11]

But isn't that how large corporations often fail, somebody buys them for a bargain basement price?

But isn't that how large corporations often fail, somebody buys them for a bargain basement price?

If intel was a failing company, that was in fear of insolvency, bankruptcy, liquidation, unprofitable and devoid of massive amounts of IP and could be easily be replaced by another vendor to make up for global capacity of chip requirements especially in x86 space that they supply what you say would be true. But not one of these parameters are true and
let alone more than one so, yes I would expect a premium to buy intel would be paid, but who here is psychic.