WTF! Our Taxpayer Money Will Pay for Intel’s $130 Billion in Stock Buybacks and Dividends?
From 2011 to 2020, Intel blew $130 billion on stock buybacks ($81B) and dividends ($49B). Now they need taxpayers to give them billions?
Related and recent articles
• Semiconductor Socialism — Why Such a Rush to Pass the CHIPS Act? • The 1985 Semiconductor Depression vs. the 2022 Semiconductor Demand Shock • 5 Things You Need to Know About U.S. Stock Buyback • Has U.S. Healthcare Really Become a Mob Protection Racket? • (Part 1) The 5 Most Important U.S. Economic Events Over the Last 50 Years • Did This Happen by Accident to 89% of America’s Stock Market Wealth?
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Imagine that the father in a family of four did this with all the money that the family had….
Imagine the husband in a family of four gave away all of his family’s money to some person he’d never met.
That person indirectly told the husband that he should do this. Heck, he pushed the husband to do this — said it was his responsibility to him and a bunch of other people whom the dad had never met. To be clear, this person — this third party — really couldn’t force the husband/father to do this, but for some reason, the guy went along with it.
Let’s be clear — this husband took all of his family’s money. Their savings, the college fund for the kids, the retirement savings for his wife and him. Their money invested in the stock market. Their emergency cash. All of it.
Let’s also imagine that there are, say, 10,000 other husbands and wives who did exactly the same thing with the money that their family had. But now they are in dire straits, and. they. need. money!
What do all these parents do now?
Why, they go to Washington, of course.
They ask Congress and the President to pass legislation that will give all of that money back to them and more. These parents want Congress to not only make them whole, heck, they want Congress to give them tons more money to keep them going for the next 10 or 20 years, too!
And the cherry on top of this shit sundae request they are making to Congress is that the parents don’t even have to promise Congress that they won’t give the family’s money away again.
Before these parents would get laughed out of Congress — because you know they would get tossed out on their asses, right? — the Representatives and Senators would of course take the opportunity to give every one of these 10,000 parents a stern, public lecture about the importance of personal responsibility.
That’s what would happen if individual working Americans made a request like that of Congress.
What if Intel went with the corporate version of that request for a handout to the US government and/or to the State of Ohio?
I’m asking because that is pretty much what has happened.
What kind of a reception do you think they would get?
Well, we know the answer to that.
Congress and the Senate fell all over themselves to pass the CHIPS Act, and Joe Biden is expected to sign it any day now. Similar kind of dynamic with the State of Ohio.
Here’s how Intel gave away what was essentially the bulk of their corporate savings (i.e., the family’s money) over the past 20+ years.
They did it with stock buybacks and cash dividends.
They didn’t have to.
But they did.
And now they need what will probably end up being tens of billions of dollars from the U.S. government and from the State of Ohio in order to try to compete with TSMC from Taiwan.
That assumes, by the way, that they are even capable of competing with TSMC.
I discussed this in an article yesterday — Semiconductor Socialism — Why Such a Rush to Pass the CHIPS Act?
As noted in that article, I have my doubts on whether Intel can compete, even if we throw money at them. And nobody in Congress or the White House seems to be pressing Intel on key underlying issues like this.
Let’s put all of this in perspective.
The cost of a brand new, state-of-the-art semiconductor fabrication line today in 2022 is in the 10 to $20 billion range
The $130 billion that Intel gave away from 2011 through 2020 alone in stock buybacks and cash dividends would today buy at least 6–12 of those state-of-the-art fab lines.
Hell, if you’re Intel and you’re going to spend that kind of money, you could probably negotiate some pretty good “quantity purchase discounts“ on the equipment you would buy. So you would get even more new fab lines for that money.
Oh wait, I forgot. I’m sorry, Intel. You GAVE AWAY all of that $130 billion, didn’t you?
But you must’ve gotten something good in return for the $130 billion, didn’t you?
“A higher stock price”…?
You pissed away $130 billion in money that Intel could have saved for a rainy day or for multiple strategic ventures to ensure the company’s future.
You’re coming hat-in-hand to Congress and to states like Ohio trying to get them to “invest in America’s semiconductor future” because YOU pissed away that $130 billion.
And you’re telling me that all you got for giving away 130 billion-with-a-B-dollars was some amount of increase in your stock price?
Seriously?
Are you kidding me?
Were your board directors and your CEO on the take — like, did someone just go into their offices and hand them paper grocery bags of cash to do this? — or were they all just inept morons?
Yes, I know. This seems like a disrespectful way to speak to you, doesn’t it? You’re probably not used to it, are you?
I mean, it must be so uncomfortable to have this said out loud, especially since only a couple people in Congress even nibbled around the edges of this in their public comments.
Bottom line, you deserve this scorn and contempt. And more.
Your market capitalization — as of the close of market today, August 4, 2022 — is $146.4 billion.
By pissing away $130 billion on stock buybacks and cash dividends from 2011 to 2020, the so-called leadership at Intel gave away an amount of money — WHEN THEY DID NOT HAVE TO — that is roughly equal to the entire market capitalization of the corporation today.
It’s impossible to imagine that Intel would have needed to go to the U.S. government or to state governments for corporate handouts if they had kept that $130 billion within the company instead of giving it away to public stockholders over the past 11 years, let alone the even larger amount of money they have given away since the late 1990s. Seriously, WTF?
Andy Grove would be ashamed and probably enraged by the dire straits that the current so-called leadership of Intel has left the company in.
And now, at a time when Congress can’t or won’t find money to fix real problems that affect tens of millions of working Americans, you’ve got Congress and the White House acting like your bitches — all because they want some kind of easy, awesome-looking win that they can use to help them going into the mid-term elections.
Don’t you feel bad at all asking the government to provide cover for your genuinely awful leadership and management?
Do you think that maybe — even if no one in Congress was going to ask you for it — that you might have proactively offered to commit to no more stock buybacks or dividends for, say, the next 10 or 20 years?
No, I didn’t think so. It would take character and principle to do that.
Seems as though character and principle are in as short supply at the top of Intel these days as competence is.
You people at Intel are either incredibly shameful or beyond shameless.
I can’t decide which.
Perhaps both?
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Related and recent articles
• Semiconductor Socialism — Why Such a Rush to Pass the CHIPS Act? • The 1985 Semiconductor Depression vs. the 2022 Semiconductor Demand Shock • 5 Things You Need to Know About U.S. Stock Buyback • Has U.S. Healthcare Really Become a Mob Protection Racket? • (Part 1) The 5 Most Important U.S. Economic Events Over the Last 50 Years • Did This Happen by Accident to 89% of America’s Stock Market Wealth?
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Again, thank you for reading, subscribing, clapping, and sharing — your time and attention are deeply appreciated!