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Jay
@mrzod
Intel's recent challenges have been on my mind the past 24 hours. Would there ever be a scenario where the company is taken private by domestic or foreign "U.S.-friendly" PE firms?
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Jay
@mrzod
While the massive equity check is the biggest hurdle (potentially solvable via a "club deal"), here's why it might make sense: 1/ Intel is a national strategic priority. It's vitally important that the U.S. can produce bleeding edge chips on U.S. soil by a U.S.-controlled firm 2/ With interest rates expected to drop soon, the government can provide attractive financing options to make PE returns palatable; this skirts the "government bailout" argument
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Jay
@mrzod
3/ Though demand for Intel's chips have softened due to Apple silicon, Windows running on ARM, Nvidia's AI lead, etc., there is still a "floor demand" from data centers. This helps de-risk the technological headwind for PE firms 4/ Private equity funds have raised eye watering amounts of capital, much of which is sitting as dry powder ready for deployment. An Intel investment aligns with infrastructure plays and the American dynamism thesis 5/ Something similar has been done before -- refer to Mubadala & AMD from the GFC. Intel may not be at this critical juncture where it requires a radical shift in business model (yet), but this gives PE firms a precedent transaction to reference Thoughts on this scenario? Can private equity be the answer for Intel's future?
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