Intel’s other shoe dropped. Less than a month after reporting a miserable fourth quarter, in which revenue fell 32% and the chip giant lost $661 million, Intel said Wednesday it was slashing its dividend 66%. It’s a logical move given that Intel needs to spend tens of billions on new chip investments in the next few years, yet burned through $9 billion in cash last year and faces another rough year in 2023. But you have to wonder why Intel’s board members didn’t realize earlier they’d have to take this step.
Intel has also gone through the requisite cost cutting, including layoffs and executive pay cuts. Even so, you can understand why a dividend cut was required. But while Intel’s at it, maybe it should have gone all the way and eliminated the dividend. In the long run, shareholders will be better off if the company reserves all of its cash for investment.
Is there anybody out there? -----in Seagate?