Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President Trump with this daily recap compiled by The Fly:
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INTEL STAKE: The Trump administration is in discussions to take a 10% in Intel by converting some or all of the company’s grants from the Chips and Science Act into equity, Mackenzie Hawkins, Ryan Gould and Josh Wingrove of Bloomberg reported on Monday, citing people familiar with the matter. Intel is set to receive $10.9B in Chips Act grants for commercial and military production, which is near the amount needed for the 10% stake, Bloomberg reports. The move would make the U.S. government Intel’s largest shareholder.
Later on Monday, SoftBank (SFTBY) and Intel announced that SoftBank will make a $2B investment in Intel common stock. The investment comes as both Intel and SoftBank deepen their commitment to investing in advanced technology and semiconductor innovation in the U.S., they said. Masayoshi Son, Chairman & CEO of SoftBank Group Corp., said: “Semiconductors are the foundation of every industry. For more than 50 years, Intel has been a trusted leader in innovation. This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role.” Lip-Bu Tan, CEO of Intel, said: “We are very pleased to deepen our relationship with SoftBank, a company that’s at the forefront of so many areas of emerging technology and innovation and shares our commitment to advancing U.S. technology and manufacturing leadership. Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment.” Under the terms of the agreement, SoftBank will pay $23 per share of Intel common stock. The transaction is subject to customary closing conditions.
Bernstein says Intel was supposed to get $10.9B of CHIPS Act funding for free. Giving this up for a 10% stake by the U.S. government “seems worse,” the analyst tells investors in a research note. The firm says that besides money, Intel needs customers, and it is conceivable that as part of the U.S. taking a stake the administration could encourage customers to use the company’s capacity. However, a straight equity-for-cash swap does not seem favorable to Intel, and “funding a build-out with no customers probably won’t end well for shareholders,” contends Bernstein.
