Nandini Roy Choudhury, writer
Brief news
- Intel executives are collaborating with advisors, including Morgan Stanley, to develop strategies to address the company’s declining business.
- Options being evaluated include the separation and sale of businesses.
- Intel shares increased by over 8% in response to the news.
Detailed news
Intel executives are collaborating with a variety of advisors to develop strategies to address its declining business, according to an individual with relevant information.
According to the individual, who requested anonymity to discuss confidential matters, Intel’s directors will likely be presented with options by those advisors, which include Morgan Stanley and other financiers, at a forthcoming board meeting in September. The advisors are currently evaluating a comprehensive array of alternatives, such as the separation and sale of businesses, according to the individual.
In Friday morning trading, Intel shares increased by over 8% in response to the report.
Bloomberg News was the first to disclose that the company was collaborating with its advisors to develop strategic alternatives. Intel representatives did not promptly respond to a request for comment from CNBC. Morgan Stanley’s spokesperson declined to provide an explanation.
On Thursday, CEO Pat Gelsinger publicly acknowledged that the company was aware of investor skepticism and was making efforts to resolve it.
“We acknowledge that we must operate with agility and urgency,” Gelsinger stated at Deutsche Bank’s Technology Conference. CNBC previously reported that the company was receiving assistance from certain advisors, such as Morgan Stanley, in order to defend itself against activism.
Gelsinger stated at the event that Intel is still on schedule to introduce its upcoming laptop central processor, Lunar Lake. Nevertheless, investors have discounted the stock by nearly 60% this year, as they do not anticipate a turnaround.
The company that was once dominant has been predominantly defeated by Nvidia, which is responsible for the production of the graphics processing units (GPUs) that are the foundation of today’s prominent AI models.
Intel announced earlier this month that it would eliminate 15,000 employees in conjunction with a dismal earnings report. The employment cuts, which were implemented as part of a more comprehensive initiative to reduce expenses, were insufficient to alleviate investor anxiety. While Gelsinger stated on Thursday that the company’s foundry division had approximately twelve prospective customers, the buildout continues to be expensive for Intel.
Source : CNBC News
