https://www.fool.com/investing/2023/02/08/intel-is-making-a-catastrophic-mistake/
7 replies (most recent on top)
I hate to say it, but it may be time to cut the dividend. Intel is no longer a stable cash cow company... it is now a risky turn-around betting the farm on the IFS strategy. The stock is overpriced given the range of outcomes on IFS. Cutting the dividend will bring the price back in line with the speculative nature of the company... but that extra cash may be needed to succeed.
Given the variance of outcomes, I cannot recommend this stock. I hope the company succeeds, but the odds are slim to none given that Intel is trying to take on one of the best run companies in the world, in a business space it has no experience in, where an ecosystem of tools and partners is needed...
@pyi+1l8rj21Q - I disagree. The 10% could very easily be the straw that breaks the camels back.
Also, it could be the straw that causes your spouse to nudge you to go get another job.
Every action has a reaction. This will too.
No company in the world exists for employees, not even in Communist countries. Intel has been a bad place for some time. If the "good people" haven't left yet, then a 10% pay cut ain't going to make them leave, especially in this job market.
Intel runs on the principle of "nobody is indispensable", no stars, only a lot of affordable bodies. It can and should have far deeper cut at this point. The fact that it hasn't is a bad sign for investors. At the same time, it bleeds value as the TMG becomes obsolete and the LTD has no good fabs for its unproven new chips. Pat need to act quickly.
Na, they will just backfill in Asia.
Lots of tech still hiring, get in before you colleagues get your spot
I spoke with someone in HR last week. Intel is suffering a loss of high quality workers at a rate not seen before, many shortly after the notice of benefit and pay reduction. HR said that the problem with that now is that these people are finding jobs immediately due to lack of qualified workers. With morale still not completely recovered from 2016 layoffs, this is not going to bode well for Intel in the job market in the future. From where will they draw the new talent they need to succeed? Go Pat! I mean go, leave, work elsewhere.
“Intel's decision to prioritize its dividend over maintaining salaries feels like shareholder theory taken to its worst extreme.”
“Smart managers know that building a successful business starts with taking care of your employees, who in turn take care of your customers, who buy your product, thereby rewarding investors with a profit. Continuing to pay a dividend while the company is losing nearly $10 billion a year and falling behind the competition is entirely backward. Intel's top competitor, AMD, doesn't even pay a dividend, which puts Intel at an even greater competitive disadvantage as long as it's committed to paying $6 billion a year that it isn't earning.”
“Intel isn't about to run out of money. It has roughly $28 billion in cash and short-term investments, but it holds $42 billion in debt, and its cash balance is likely to be depleted further in 2023.”
Another good read here how lost or blind the executives leading Intel into the abyss are!
https://www.semianalysis.com/p/intel-roadmap-and-pc-tam-update-tone