https://www.calcalistech.com/ctechnews/article/bypn9cdrc
Intel’s focus on stock price over innovation left it playing catch-up in the AI race—and tech leaders should take note.
If the late legendary Intel CEO Andy Grove wake up today, his first words should be "WTF".
It's not about buybacks, it's about ALSO having a strategy and executing to it.
Apple and Nvidia also executes buybacks but it works for them.
@1fb, it is not just tech but most companies now do this. It is why CEO salaries have skyrocketed. The idea is to incentivize them to grow the company not artificially inject cash to shore up the stock price. NVIDIA and AMD don't need to manipulate their stock prices. They are delivering in-demand products and innovations.
@1zym I agree with you that tying exec pay with Wall St is a disaster for long term company growth. But isn't that the POR throughout the tech landscape? Are they paying execs in cash in Nvidia and AMD?
The only shareholders management are worried about pleasing are themselves. This is just greed at work. The higher you go at Intel the more your compensation is based on stock. Senior management is only worried about short term gains to line their pockets. You can write posts on this site listing all of the bad decisions and failures of the past quarter century but what brought Intel down was simply greed and arrogance. The arrogance was usually in the form that they were the smartest guys in the room and therefore always right. Intel hasn't been the smartest guys in the room for over a quarter century but they are too arrogant to figure that out. They did figure out the greed aspect.
Worst of all, current market cap is roughly $96B.
Intel invested $108 billion in share buybacks between 2005 and 2020. The repurchases, which were meant to create value for shareholders without necessarily creating value for the company, didn’t pan out as expected. The shares Intel purchased in 2005 were priced at around $23, a price higher than the shares are worth today, which hover around $21. Today, the company is valued at just $90 billion, less than the total amount it spent on buybacks. In a 2021 interview, Intel CEO Pat Gelsinger said, "We will not be as focused on buybacks as in the past," when asked about the company's expenditure on buybacks compared to its investment in development. That same year, Gelsinger’s compensation package totaled $179 million, most of which was stock-based. It’s no surprise that Intel missed out on the mobile market and is now playing catch-up in the artificial intelligence space. While competitors were focusing on developing disruptive technologies, Intel spent fortunes on stock buybacks.
This is how the executives were lining there pockets while you and I were working our a-s off wondering why they didn't want real innovation. When corporate videos tell you to work harder and be dedacated to Intel tell them to fu-k off.
Buy backs were happening long before BK
All thanks to bumbling BK.