Pat Gelsinger, CEO of Intel, spoke on CNBC’s Squawk Box at the WEF Annual Meeting in Davos, Switzerland on January 16, 2024.
Adam Galici CNBC
Intel executives are working with various advisors to formulate options to address its flagging business, according to people with knowledge of the matter.
These advisors, including Morgan Stanley and other bankers, likely to present Intel directors with options at the upcoming board meeting in September, said the person, who requested anonymity to discuss confidential matters. The adviser is considering various options, including splitting up and selling the business, the person said.
Bloomberg News first reported that the company is working with advisors to make strategic choices. A representative for Intel did not immediately respond to CNBC’s request for comment. A Morgan Stanley spokeswoman declined to comment.
Intel shares rose more than 4% on the report in pre-market trading on Friday.
CEO Pat Gelsinger acknowledged publicly on Thursday that the company is aware of investor skepticism and is working to address it.
“We realize that we need to operate efficiently as quickly as possible,” Gelsinger said at the Deutsche Bank Technology Conference. CNBC previously reported that several advisers, including Morgan Stanley, are helping the company in its activism defense.
Intel remains on track to launch the next iteration of the laptop’s central processor, Lunar Lake, Gelsinger said at the presentation. But investors do not see a turnaround on the horizon, and have pushed the stock down almost 60% this year.
The once-dominant company has been trounced mainly by Nvidiawhich produces the graphics processing unit (GPU) that is at the heart of today’s popular AI models.
In addition to its disastrous earnings report earlier this month, Intel announced it would lay off 15,000 employees. The job cuts, part of a wider focus on cost-cutting, have done little to ease investor fears. And while Gelsinger said on Friday that the company’s foundry business has about a dozen interested customers, the buildout remains expensive for Intel.
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