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Intel's stock drops 30% overnight —company sheds $39 billion in market cap | As of now, Intel's market value is a fraction of Nvidia's worth and less than half of AMD's (www.tomshardware.com)

submitted 3 months ago by [email protected] to c/[email protected]

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Intel's stock dropped around 30% overnight, shaving some $39 billion from the company's market capitalization since rumors of a pending layoff first emerged. The devastating results come after the chip giant reported a loss for the second quarter, complained about yield issues with the Meteor Lake CPU, provided a modest business outlook for the next few quarters, and announced plans to lay off 15,000 people worldwide.

When the NYSE closed on July 31, Intel's market capitalization was $130.86 billion. Then, a report about Intel's massive layoffs was published, and the company's market capitalization dropped sharply to $123.96 billion on August 1. Following Intel's financial report yesterday, the company's capitalization dropped to $91.86 billion. Essentially, Intel has lost half of its capitalization since January. As of now, Intel's market value is a fraction of Nvidia's worth and less than half of AMD's.

As Intel's actions look rather desperate, analysts believe that Intel's challenges are existential. "Intel's issues are now approaching the existential," Stacy Rasgon, an analyst with Bernstein, told Reuters.

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[–] sp3tr4l 46 points 3 months ago (21 children)

They also announced they are going to stop paying stock dividends starting Q4.

https://www.marketwatch.com/story/intel-to-suspend-dividend-cut-15-of-staff-upon-big-earnings-miss-d811a220

Back in ye olden days, you used to buy a stock largely due to its ability to regularly pay you back a dividend, as a more conventional kind of investment, before the more modern idea of 'buy low sell high' became the most prevalent investment strategy / market dynamic.

[–] [email protected] 15 points 3 months ago (17 children)

I've always thought that stocks have to pay dividents, like that's the whole point of having it? I.e you get paid by the company regularly some of their profit, based on how much stock you have.

Does this mean that the only way how to make money from their stock now is to sell them to someone else? But then, it has nothing to do with the actual company and money they make, but you are paid by someone totally unrelated - the guy who buys the stock from you. I don't get it, I suppose I'm missing something.

[–] [email protected] 1 points 3 months ago

You can still find stocks that pay dividends. 3-month treasury dealios pay out regularly, and something like MORT (A REIT ETF) has like 11% dividend rate. Companies like Microsoft and Amazon also pay dividends, but small, like 3-5%.

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