Intel (NASDAQ:INTC) sells its stake in ARM Holdings (NASDAQ:ARM) amid losses.
Intel(INTC.US) sold its stake in ARM Holdings(ARM.US), a chipmaker, in the second quarter. The company is struggling with losses and is cutting jobs and expenses to turn around its business. It said in a filing on Tuesday that it no longer owns the 11.8 million shares it held three months ago. At the average price of ARM shares during that period ($124.34), Intel would have raised about $1.47 billion.
Intel is trying to regain its footing in an industry it once dominated. Earlier this month, the company released one of its worst quarterly reports in its 56-year history, causing its stock to fall nearly a third overnight, wiping out more than $300 billion in market value. To get back on track, Intel is cutting 15,000 jobs and other expenses while also suspending its dividend.
While selling ARM shares may have provided a windfall, Intel said its investments in equity securities still lost $120 million during the period. A representative for the company declined to comment.
Arm licenses chip designs and blueprints to companies including Intel. After being acquired by SoftBank in 2016, Arm went public again in September last year and had its largest initial public offering (IPO) in its history. Most of its shares are now held by SoftBank. Intel’s stake was first reported in its 13-F filing for the third quarter of 2023. Arm mentioned Intel in its prospectus and said it was one of many large technology companies that have launched products using Arm’s chips.
Since Arm’s re-listing, its stock has been volatile, rising 146 per cent from its $51 IPO price. It recently traded below $125 but has been above that level for most of June and hit a high of $188.75 in July. Meanwhile, Intel’s stock has recently lagged, falling 58.72 per cent so far this year.
Intel’s chips are mostly based on its own designs. But those products have lost out to competitors, many of which use Arm’s products.