Intel is desperately looking for cash? It just dumped Arm Holdings shares. The giant’s problems are mounting

The information about the sale of 1.18 million shares of Arm Holdings was disclosed on Tuesday. Intel sold the company’s shares based on the market price of $ 124.3 per share. This transaction brought the American chipmaker about $ 146.7 million. Both Intel and Arm Holdings declined to comment on the matter. Market analysts quoted by Reuters, however, point out that the decision is consistent with the company’s previously announced restructuring plan, which assumes regaining financial liquidity.

Intel is laying off workers and is desperately looking for cash.

In early August, Intel announced a drastic cost-cutting plan that includes laying off 15 percent of its employees, or as many as 15,000 people. Most of them will lose their jobs this year. The American processor manufacturer also announced that it would reduce investment spending (20 percent) and suspend dividend payments, which shareholders definitely did not like.

As a result, Intel shares plunged on the stock exchange. On Wednesday, August 7, they fell to $18.88, the lowest in over a decade. Later, there was a slight rebound. However, this does not change the fact that they are still almost 60 percent cheaper than at the beginning of this year.

with a valuation of $19-20, the share price is almost equivalent to the so-called tangible book value of the company. This is all the more worrying because in the case of such large companies as Intel, the value of the shares should exceed their tangible book value, because in addition to physical assets, these companies also have intangible assets (e.g. patents).

By selling Arm Holdings shares, Intel continues its panic-driven search for cash. As of the end of June, the Santa Clara-based company had $11.29 billion in cash and cash equivalents, with total current liabilities of about $32 billion.

Processor problems sink tech giant

To make matters worse, for several weeks now, Intel has been struggling with one of the biggest technological scandals in recent years. It concerns problems with Intel Core desktop processors from the Raptor Lake family (13th and 14th generation). The processors are wearing out faster, which is due to the degradation of silicon transistors. This in turn leads to problems with the stability of the equipment (hanging) or its complete failure.

The scale of the problem is global, and neither Intel nor motherboard manufacturers have found any effective way to solve it. For many users, this may mean the need to replace the processor with a new one. In connection with this, in early August, Intel announced that it would extend the warranty for 13th and 14th generation Intel Core processors. For an additional two years. As a result, the systems will be covered by a five-year warranty, instead of the standard three years. The need to replace faulty systems for free is associated with large additional costs, which will make it even more difficult for Intel to regain financial liquidity.