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U.S. government takes 10% stake in Intel

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Re: U.S. government takes 10% stake in Intel

#621

Post by thisisit »

lugu wrote: post #146
robocat wrote: post #132

Earlier quoted context omitted.

So no shareholder vote required? It is equivalent to a 10% dilution (shares issued for no extra cash).

How can this be any good for Intel? Why is the stock value bumping 6%?

Government now has a vested interest in seeing Intel succeed. And as much as RW debate in bad faith about cutting public funding being good and private entities should pick up the slack etc. there is no bigger catalyst than government policy. Intel can now get preferential policies like bigger tax breaks/holidays, preferential treatment in government contracts, cheaper access to Federal land etc.

In the long term though, at least in hands of the government like the current admin, they will ensure Intel slows down innovation. They will push for every company in US to use Intel chips in one way or the other - national security and what not. Without competition companies often get complacent - not many can match the might of a government and US govt at that. So, yay for national security and nay for Intel becoming innovation powerhouse.

Re: U.S. government takes 10% stake in Intel

#622

Post by sschueller »

sgnelson wrote: post #468

Everyone is talking about "bailouts" and "owning a company that the government funds." This isn't about that at all. This is about the breakdown of the rule of law, a unitary executive bypassing all other branches of government and demanding a private enterprise give itself over to the government. If you don't think there was an "or else" as part of this deal, you're largely mistaken. If you don't think that there wi…

This will scare off foreign investment. Especially pharma which can be considered national security. Why would I invest billions in the US to risk having my factories taken by the US government when the market in India or China is way bigger and the risk at this time seems a lot less.

Re: U.S. government takes 10% stake in Intel

#623

Post by solatic »

bongodongobob wrote: post #395
ch4s3 wrote: post #273

Earlier quoted context omitted.

I’d really rather we didn’t bail out these companies at all. It clearly creates moral hazard and makes it hard for better run companies to enter markets.

Well as much as you don't like it, companies this big failing is terrible for the economy and in this case, national security to a degree. I'm of the thinking that when your company gets to a certain size we'd be well off nationalizing. Apple has more money than some nation states. Something that huge has the potential to affect global politics. There's lots of other reasons too, but this isn't like letting the corne…

> I'm of the thinking that when your company gets to a certain size we'd be well off nationalizing.

The public sector is great at two things: (1) getting literally millions of people to show up to work and do well-defined jobs (i.e. nothing outside the lines) that do not change from year to year, and (2) dumping billions into research, with very little of (2) affecting (1). Critically, the public sector has extraordinary difficulty with the agility needed for iterative product development.

If companies get to a certain size and their day-to-day operations are more-or-less fundamentally the same year-after-year, yeah there's an argument for nationalizing them. You see this in arguments to nationalize segments from oil refineries, apartment construction, and airlines. There's something coarse about caretaker CEOs and private shareholders getting rich, instead of the public purse, off the economic rents thrown off from a mature machine that doesn't have much more, if any, room for growth. But the key question is whether the potential for growth has been fully exploited or not; if it hasn't been, then the government certainly won't succeed at exploiting additional growth, and it's better for the company to stay in private hands, which will be motivated to privatize the wealth from achieving that growth, and the government will be paid more in taxes if they succeed.

That's why I'm not convinced chip manufacturing is there when there is still yearly research into reducing process sizes. Maybe there's a case for nationalizing the foundry lines producing older, larger processes that are used in current weapons designs, but that's not the case for nationalizing the whole company.

Re: U.S. government takes 10% stake in Intel

#624

Post by dgb23 »

FollowingTheDao wrote: post #277
jjcm wrote: post #199

In general I would rather the government take a stake in corporations they're bailing out. I think the "too big to fail" bailouts in the past should have come with more of a cost for the business, so on one hand I'm glad this is finally happening. On the other hand, I wish it were a more formalized process rather than this politicized "our president made a deal to save america!" / "Intel is back and the government is…

I agree. In fact, I think the government should own all utilities like they do in more socialist countries. It gets rid of price gouging, and the stabilizes the market in things that are necessary for human life. The natural resources of the country should belong to all of us. Not just a select few.

Fossil fuels come to mind.

Re: U.S. government takes 10% stake in Intel

#625

Post by Terr_ »

jjcm wrote: post #199

In general I would rather the government take a stake in corporations they're bailing out. I think the "too big to fail" bailouts in the past should have come with more of a cost for the business, so on one hand I'm glad this is finally happening. On the other hand, I wish it were a more formalized process rather than this politicized "our president made a deal to save america!" / "Intel is back and the government is…

> On the other hand, I wish it were a more formalized process

It must at least involve Congress!

What's happening here is crazy: It's the same as if Congress authorized $X for a city bridge and Trump comes in and holds up the funds demanding a cut/kickback of the tolls.

The Constitution does not give the Executive the power to arbitrarily modify what Congress has authorized, converting between grants versus loans versus stock-purchases versus plain extortion.

Re: U.S. government takes 10% stake in Intel

#626

Post by e40 »

sgnelson wrote: post #468

Everyone is talking about "bailouts" and "owning a company that the government funds." This isn't about that at all. This is about the breakdown of the rule of law, a unitary executive bypassing all other branches of government and demanding a private enterprise give itself over to the government. If you don't think there was an "or else" as part of this deal, you're largely mistaken. If you don't think that there wi…

Straight up blackmail. It was my immediate thought, and nothing I’ve since it was announced has changed my opinion.

Re: U.S. government takes 10% stake in Intel

#627

Post by dgb23 »

KetoManx64 wrote: post #399
ecocentrik wrote: post #216

Earlier quoted context omitted.

If the argument was for protecting Intel, then the US government should be placing huge orders with Intel for solutions that will fund R&D and allow the company to regain its position as a foundry. They should be tapping into the defense budget. DARPA should be involved. This was an opportunity for petty extortion and a step towards socialism.

Government involvement is the fastest way to corrupt the purpose of an organization, hollow out its soul and quickly get rid of all the competant people. There's a reason that the DOGE findings made a laughing stock of government employees.

Depends on the implementation.

Switzerland owns its energy companies and its public transport company. Hugely successful.

Re: U.S. government takes 10% stake in Intel

#628

Post by thisisit »

jjcm wrote: post #199

In general I would rather the government take a stake in corporations they're bailing out. I think the "too big to fail" bailouts in the past should have come with more of a cost for the business, so on one hand I'm glad this is finally happening. On the other hand, I wish it were a more formalized process rather than this politicized "our president made a deal to save america!" / "Intel is back and the government is…

Government shouldn't bail out anyone. Period. It should enact preferential policies like grants, tax cuts, subsidies etc. for industries they want to promote. It is done all the time. That is what happened with the CHIPS Act.

The moment 10% stake was announced this became political. While the stated reason might be national security etc, in reality something else might be at play.

One, this government and its supporters have been talking about government "wasteful" spending. So, a stake shows that they got something in return for that public money. The money is now "well spent".

Second, it helps boost the political "dealmaker" image of POTUS and we all know how much he cares about his image.

Re: U.S. government takes 10% stake in Intel

#629

Post by theurerjohn3 »

BurningFrog wrote: post #323

So did they buy these stocks from Intel itself? Does that dilute the share other intel stock owners have? This stuff always confuses me.

> So did they buy these stocks from Intel itself?

in a sense, although buy is not quite the right word. there were grants promised to chip manufacturers under certian conditions. trump decided to wave those conditions just for intel in exchange for 10% of the company.

> Does that dilute the share other intel stock owners have?

no, the shares were already existing and owned by intel.

Re: U.S. government takes 10% stake in Intel

#630

Post by foxglacier »

colmmacc wrote: post #380
jjcm wrote: post #199

In general I would rather the government take a stake in corporations they're bailing out. I think the "too big to fail" bailouts in the past should have come with more of a cost for the business, so on one hand I'm glad this is finally happening. On the other hand, I wish it were a more formalized process rather than this politicized "our president made a deal to save america!" / "Intel is back and the government is…

It's not otherwise related to all this but a real bug bear of mine is that municipalities don't get part ownership - along with controlling rights for matters like sales or relocations - of sports teams when we subsidize their stadiums through taxes.

The municipalities could negotiate for those rights when they agree to pay for the stadium. It's on them if they risk it.
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