Intel Stock Pushes Higher After Upbeat News
Intel Stock Pushes Higher After Upbeat News
Low stock prices and reports of possible acquisitions are attracting investors’ attention
- Intel finishes up over 3% after flow of positive news continues.
- Apollo Investment Group is scheduled to invest up to $5 billion in the chip maker.
- Takeover news is helping to fuel speculative buying as stock trades near recent lows.
Intel (INTC) finished Monday up over 3%, as investors digested the latest round of positive news for the embattled chip maker.
Apollo Global Management made an offer to invest up to $5 billion in company, according to a Bloomberg report citing people familiar with the matter.
The moves came as Intel hovers near its lowest-traded levels since 2010. Those lows came after Intel dropped over 31% in late July following a downbeat quarterly earnings report. Intel not only suspended its dividend but nudged its guidance lower. The news was especially bad amid a bright backdrop for investments in chips .
The recent news, however, seems to place Intel at a turning point. Investors are jumping onboard, given the relatively low stock price. While challenges remain and leadership has a long way to go in proving it could get the company back on track, investors’ interest is picking up.
An Intel acquisition?
Bloomberg reported Apollo could make an equity stake for the $5 billion. This came after news Qualcomm (QCOM) has floated the idea of buying Intel. While unconfirmed, the news could invite attention from others looking for a merger. Broadcom (AVGO) could be one interested party, but it is just speculation on the part of the market for now.
The interest in buying Intel would need to move rather quickly, as a rapid increase in its stock price on the back of good news could complicate or make it more expensive to complete a purchase. And antitrust regulations will be considered as well.
Intel recently secured a deal with Amazon (AMZN) to make artificial intelligence semiconductors. The turnaround plan also includes a spinoff for its foundry business, something that would likely help attract fresh capital without the strings attached to Intel as a whole.
Trading Intel amid positive news
Despite the recent gains, Intel stock remains near the 2010 lows. However, the recent volatility has baked some juicy premium into its options. The expected move over the next 11 days is for +/- 1.57 points, which translates to 7% of the current stock price. That said, traders who want to find some strategies to sell premium could probably do so.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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