(Reuters) -Intel shares sank nearly 28% on Friday and were set for their worst day ever after the company suspended dividend and slashed workforce to fund a costly turnaround for its chip-making business. The Intel shares slump indicates that the company’s efforts to regain its footing are not yet yielding positive results. #IntelSharesSlump
The company was set to lose about $35 billion in market value due to a disappointing forecast and planned 15% job cuts. These issues raised concerns about its ability to catch up with Taiwan’s TSMC and other chipmakers.
“Intel’s issues are now approaching the existential in our view,” Bernstein analyst Stacy Rasgon said.
He mentioned that there would be “going concern” talks in other situations. However, Intel could add $40 billion in cash by 2025 through these moves, subsidies, and partner contributions.
“Intel will survive (in some form) to continue the fight,” Rasgon said.
Shares of other chip firms also fell, with Arm, Micron Technology, GlobalFoundries and U.S.-listed shares of TSMC trading down between 2.8% and 6.7%.
Wall Street darling Nvidia was 2% lower after a report about an investigation by the U.S. Department of Justice. #IntelSharesSlump
In addition, the worsening situation calls for a critical reassessment of Intel’s strategic plans. The Intel shares slump underscores the need for effective solutions to address the company’s performance issues. Thus, both investors and analysts remain cautious as they monitor Intel’s next steps.
