Intel’s shares rose sharply Tuesday after the computer chip giant said it was ready to work with a hedge fund on changes to its business to increase shareholder value.
The market action came after Intel confirmed it had received a letter from Third Point led by activist Daniel Loeb. Intel was up 4.9 percent to close at $ 49.39 (around Rs 3,600).
“Intel Corporation welcomes the contributions of all investors to increase shareholder value,” said the California technology giant.
“With that in mind, we look forward to talking to Third Point about your ideas on this goal.”
Third Point’s letter said Intel should consider outsourcing its manufacturing operations to keep up with competitors in the industry, including Taiwan-based TSMC and South Korean giant Samsung.
“We encourage the board to hire a reputable investment advisor to evaluate strategic alternatives, including whether or not Intel should remain an integrated device maker and the possible disposition of certain failed acquisitions,” the letter said.
While Intel remains one of the world’s leading chipmakers, it has lagged behind its competitors in the fast-growing mobile device segment, and its chips are being phased out by Apple, which is developing its own microprocessors for its Mac computers.
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