Intel Shares Surge As Reuters Reports Hedge Fund Third Point Urges Company To Explore "Deal Options"

Intel Corp (INTC) shares have surged more than 4% after hedge fund Third Point urges the semiconductor company "to evaluate strategic alternatives" including " potential divestment of certain failed acquisitions", reported Reuters.

Third Point CEO Daniel Loeb said in the letter that Intel’s most urgent task was addressing its “human capital management issue”, as many of its talented chip designers have fled, “demoralized by the status quo”.

“Without immediate change at Intel, we fear that America’s access to leading-edge semiconductor supply will erode, forcing the U.S. to rely more heavily on a geopolitically unstable East Asia to power everything from PCs to data centers to critical infrastructure and more,” Loeb wrote.

All of which sparked a surge in the stock...

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Loeb went on to warn more geopolitically that:

“Without immediate change at Intel, we fear that America’s access to leading-edge semiconductor supply will erode, forcing the U.S. to rely more heavily on a geopolitically unstable East Asia to power everything from PCs to data centers to critical infrastructure and more."

The news was enough to lift iShares PHLX Semiconductor ETF SOXX (which has a 7.55% weighting in the ETF basket) up 1% but still down .4% on the session following news Senate Majority Leader Mitch McConnell blocked Senate Minority Leader Chuck Schumer attempt to fast-track $2k stimulus checks.

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Third Point, which has $15 billion in assets under management, has experience in pushing companies to pursue deals, including at Prudential Plc, Yum! Brands Inc, Dow Chemical, and United Technologies.

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