Intel sold $20 billion worth of stock at $95 per share. The company claims this has something to do with AI demand accelerating. The stock closed Friday at $21.
Someone needs to explain to me how you price shares at $95 when the market says they're worth $21. That's not a discount. That's not even a premium. That's a different f*cking company.
The press release mentions technology giants shelling out trillions for AI infrastructure. Cool. Intel makes chips that go in servers. So does everyone else. Nvidia already won that race. AMD is trying. Intel is the guy who shows up to the marathon in Crocs asking if there's still time to register.
But sure, let's pretend this $20 billion offering priced four times higher than the actual stock price makes sense because someone typed the letters A and I into a PowerPoint. The institutional investors who bought this offering saw those two letters and apparently forgot how to use Yahoo Finance.
You know what accelerating AI demand actually means? It means Nvidia's data center revenue goes up. It means Microsoft and Google spend more on cloud infrastructure. It means Intel's CEO gets to say the words "AI demand" on an earnings call while the stock trades at a fifteen-year low.
Retail traders will see this headline and think Intel is undervalued. They'll buy shares at $21 and feel smart because it's so much cheaper than the $95 offering price. They'll ignore the fact that institutional money paid $95 for shares worth $21, which means someone negotiated the worst deal since Manhattan.
The only thing accelerating here is the speed at which your portfolio goes to zero.
Photo by Brecht Corbeel on Unsplash
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