The value of the U.S. government's stake in Intel has quadrupled to about $36 billion after the chipmaker's financial outlook showed a recovery in sales. That equates to a paper return of nearly $27 billion since Intel and the U.S. government announced the investment plan in August. The unusual investment comes after Chief Executive Chen Liwu used a series of charm offensives to win support from the White House and mend ties with Trump. Prior to this, Trump once called on Chen Liwu to step down.
The agreement previously announced by the White House allows the U.S. government to acquire 433.3 million shares of Intel common stock at a price of $20.47 per share under certain conditions. The investment value reaches US$8.9 billion. The government holds more than 270 million shares directly, with some held in escrow accounts. The above book valuation assumes that the government exercises all of its purchase rights under the agreement.
In addition to the investment in Intel, the Trump administration has announced more than a dozen other agreements to support the development of key industries such as rare earths, steelmaking and nuclear energy. The Trump administration is also currently considering a bailout package for Spirit Airlines that could give the U.S. government an option to hold up to 90% of the airline after it emerges from bankruptcy.
"We were the chip capital of the world," Trump told reporters in Washington on Thursday, "and now Intel is coming back, and all the chip companies are coming back."
Intel shares rose 24% to $82.74 at 11:13 a.m. New York time, hitting a record high. Previously, the stock hit $85.22, which valued the U.S. government’s holdings of Intel shares at nearly $37 billion.