Abstract:
Intel's stock price plummeted on Friday, causing the U.S. government's holdings in the company to shrink by about $10 billion in market value, but the investment is still profitable overall. Last August, the Trump administration acquired a 9.9% stake in the chip company for $20.47 per share. The initial stake, which totals 433.3 million new shares, is worth an initial investment of $8.9 billion. Intel's stock price surged earlier this year; the stock closed at $92.07 on Thursday, corresponding to a market value of $39.9 billion for the U.S. government's stake.
However, the stock suffered heavy losses overnight. It plunged more than 25% at the opening on Friday to $68.35, with the latest book value of the government’s holdings being about $29.6 billion.
The violent fluctuations in stock prices highlight the ups and downs of government equity investment. This is also a new test for the Trump administration’s core investment portfolio, which currently covers 40 companies.
The company’s market value has evaporated by hundreds of billions of dollars
Intel reported a larger-than-expected decline in PC business revenue and fourth-quarter revenue guidance that fell short of Wall Street expectations, causing investors to sell off.
Intel expects fourth-quarter revenue of $15-16 billion, well below analysts' expectations of $17 billion; earnings per share are expected to be $0.25, compared with consensus expectations of $0.43.
Draged by its performance outlook, Intel's market value evaporated by more than $100 billion in early trading on Friday.
Company logo outside the Intel microprocessor plant in Chandler, Arizona.
Trump has promised that government investment in Intel will bring high returns to taxpayers, and the White House has repeatedly cited this investment as an argument. In September this year, an AI picture was circulated on "Real Social", showing the president "stock trading" in the Oval Office, with Intel's stock price showing $95 on the screen.
Trump has previously exaggerated this investment income, once claiming: "I have made hundreds of billions of dollars in stocks and other assets for the United States, not for myself."
Even after the stock price plummeted, Intel's investment was still very profitable, and the stock price level on Friday was still about three times the original purchase cost of the U.S. government.
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