When the split happens, what will happen our stock if our company splits into 2 completely different companies?
I don’t want my investment to go anywhere near Foundry Failure
7 replies (most recent on top)
the problem for foundry is that the 'seriously discounted rate' they charge product groups is the actual market rate. its just that foundry can't do it. foundry needs to cut wafer cost 50% to become profitable. that's the problem, not the sales price. product groups can walk across the street and get the same wafer made for 50% less than intel can make it. intel foundry has no value whatsoever other than some outdated capacity.
The company won't voluntarily split, both new companies would fail. The products are mediocre at best and x86 is losing market share with no end in sight. Foundry doesn't have enough customer to support itself. The more likely scenario is a breakup and sell off to other companies. Foundry will be US based for national security reasons. Product side will be harder to sell, the IP is stale and AMD can deliver any required designs to support x86 based applications until they get ported over to new architectures.
Everybody who thinks the product side will be rosy after a split needs to take a step back. Once the split happens, foundry will be charging market rates (not the Intel seriously discounted rate) which will make the product side much less profitable.
When the company splits, the design portion will do very well with as much 50% profit.
R&D costs for semiconductor process will be eliminated. No need to build expensive fabs
The foundry part is where challenge is. There was never any sense buying wafers from TSMC while doing expensive development in parallel.
The INTC stock will do very well if it stops semi process development.
Do we get stocks in the new company if they end up splitting?
Well. In theory, Product relieves itself of a lot of debt once the red headed step child, Foundry, packs it’s bags and leaves. INTL-A lives a life of luxury whilst INTL-B can be found living under a bridge. Some people will opt for voluntary simplicity
You mean reverse split when it reaches $5 right b4 filing for bankruptcy?