Even management’s demonstration of their intentions to change something in Intel’s business can give confidence to investors in the company’s capital, which is why news about staff reductions is often perceived positively by shareholders. Yesterday’s piece of news about upcoming changes also contributed to the growth of Intel’s stock price, and it did not end after the close of main trading.
Image Source: Intel
As of Tuesday morning, it can be stated that Intel shares yesterday managed to strengthen by 6.36% to $20.91 per share, and after the close of trading they increased in price by another 7.99% to $22.58 per share. All three major management announcements had an encouraging impact on investor sentiment. First, Intel’s contract division will gain even more independence, mainly in the context of easier access to external sources of financing for its activities. Parent Intel still expects to turn its manufacturing division into a separate public company, according to CNBC. In principle, something similar has already happened with Mobileye, whose shares are traded on the US stock market, but are mostly concentrated in the hands of Intel. The company’s manufacturing division will be managed by an independent management team.
Secondly, Intel’s stock price was positively influenced by the news that the company had allocated $3 billion in targeted subsidies for the implementation of the Secure Enclave program. Preliminary agreements with the US authorities in this area were reached back in March of this year, then the amount was about $3.5 billion, but in the final version it decreased slightly. Intel will use these funds to create an infrastructure for the production of chips and their packaging for US defense needs.
Finally, the deal with Amazon, which involves the release of chips using Intel 18A technology and Xeon 6 central processors using Intel 3 technology for the needs of the server division of this company, also fueled investor optimism and contributed to the growth of the company’s stock price. Since the beginning of the year, Intel shares have dropped by 60%, so this week’s correction should have a beneficial effect on investor sentiment.