Intel Prepares for Possible Activist Investors After $1.6 Billion Loss

Intel Corp. has reportedly enlisted the help of advisors, including experts from Morgan Stanley, to brace itself against potential shareholder activism, according to a report.

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The report, which cited sources familiar with the situation who preferred to remain anonymous due to confidentiality concerns, suggested that Intel is taking proactive measures to safeguard the company. However, when contacted by MarketWatch for a comment on the report, a spokesperson for Intel declined to provide any information. Representatives from Morgan Stanley also did not respond to requests for comment.

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Despite the news, Intel's shares held onto a 1% gain in after-hours trading on Friday, following a 2.2% rise during the regular trading session. However, this small uptick follows a period of significant losses for the stock. Intel's shares have plummeted nearly 70% this year as the company grapples with challenges in adapting to the rapidly evolving AI landscape, where rival Nvidia Corp. has emerged as a dominant force. Earlier this month, Intel reported a $1.6 billion loss for the quarter, further highlighting its struggles.

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It remains unclear whether Intel is currently facing new pressure from activist investors, as there has been no formal campaign launched and no reports of any activist investor approaching the company’s board. The move to hire advisors could be a preemptive strategy to prepare for any potential challenges that may arise.

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In recent months, shareholder activism has made headlines with significant campaigns targeting major companies. For example, Elliott Investment Management launched an offensive against Southwest Airlines Co., while Starboard Value called for changes at the software company Autodesk Inc. These instances highlight the growing trend of activist investors pushing for changes at prominent corporations.

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As Intel navigates these turbulent times, the decision to bring in advisors suggests that the company is gearing up to defend itself against any possible attempts by activist investors to influence its direction. With the semiconductor industry in flux, particularly with the rise of AI technologies, Intel's ability to adapt and compete will be closely watched by both investors and analysts. The company's actions in the coming months could play a critical role in determining its future trajectory in a rapidly changing market.

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