Intel Sells Arm Shares for $147M, Profits Nearly 144%!

Intel has divested its entire holding of 1.18 million shares in Arm Holdings during the second quarter of this year, as revealed in a recent regulatory filing. Based on Arm's average stock price of $124.34 per share during this period, Intel is estimated to have generated approximately $146.7 million from the sale.

Arm Holdings, a leading semiconductor IP company, went public on the Nasdaq on September 14, 2023, with an initial public offering (IPO) price of $51 per share, raising around $4.87 billion. On its first day of trading, Arm's stock surged, closing with a 24.69% increase at $63.59 per share, giving the company a market valuation of $65.248 billion.

Since its IPO, Arm's stock has seen significant growth, driven by the ongoing surge in demand for AI technology. In 2024, the stock reached a high of $188.75 per share, pushing Arm's market capitalization above $200 billion. As of August 13, 2024, Arm's stock was trading at $123.79 per share, with a market cap of $129.7 billion.

Prior to its IPO, Arm secured several high-profile investors as cornerstone partners, including Intel, Apple, Nvidia, Alphabet (Google's parent company), AMD, TSMC, MediaTek, Samsung Electronics, Synopsys, and Cadence. These companies collectively purchased $735 million worth of Arm's American Depositary Shares (ADS).

Intel's investment in Arm, made at the IPO price of $51 per share, initially cost approximately $60.18 million (excluding transaction fees). The sale of its shares in the second quarter yielded around $146.7 million, resulting in a profit of about $86.52 million, representing a 143.77% return on investment.

Intel's decision to sell its Arm shares aligns with the company's broader financial strategy, as it faces significant economic challenges. In its Q2 2024 earnings report, Intel disclosed a GAAP net income loss of $1.6 billion and an over 80% decline in Non-GAAP net income, both falling short of analyst expectations. In response, Intel announced a 15% global workforce reduction, affecting more than 15,000 employees, as part of a $10 billion cost-cutting initiative.

The sale of Arm shares appears to be a strategic move by Intel to enhance its cash reserves, positioning the company to better navigate the financial difficulties ahead.