Intel Confirms No Sale of Mobileye Stake, Dashing Speculation on Capital Raise
Intel has officially ruled out selling its majority stake in Mobileye, maintaining its commitment to the self-driving technology firm amid ongoing corporate restructuring efforts.
Highlights
- Intel confirms it will retain its controlling interest in autonomous vehicle tech leader Mobileye.
- Potential sale of Mobileye shares was considered as part of cost-cutting strategies to support Intel's turnaround.
- Despite a challenging year with shares losing over half their value, Intel’s stock rebounded following CEO Pat Gelsinger’s recent strategic update.
On Thursday, Intel (INTC) announced it has no intention to divest its majority ownership of Mobileye (MBLY), the self-driving technology company it acquired for $15.3 billion in 2017 and later spun off as a publicly traded entity in 2022. Intel currently holds approximately 88% of Mobileye's shares.
Following this announcement, Intel's shares climbed nearly 2%, while Mobileye's stock surged by 15%, reflecting investor confidence in the decision.
Intel’s Strategy to Optimize Operations
Intel had been exploring various avenues to reduce costs and improve financial health, including the potential sale of part or all of its Mobileye stake. This move was part of broader efforts to stabilize the company amidst market pressures.
CEO Pat Gelsinger recently outlined plans to sell a portion of Intel’s stake in its Altera programmable chip division and reduce real estate holdings. The company is also progressing towards its goal of cutting approximately 15,000 jobs by year-end.
Market and Analyst Reactions
Intel’s stock has gained over 7% in the week following the CEO’s strategic update, though many analysts remain cautious. A survey by Visible Alpha showed most of the 17 analysts maintaining a "hold" rating on Intel shares, with Bank of America noting that the update raised "more questions than answers."
Despite recent gains, Intel’s stock price has declined nearly 58% since the beginning of the year, marking it as one of the poorest performers in the S&P 500 index.
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