Intel stock’s more than 25% drop on Friday has shaved about $10 billion from the US government’s stake in the company, though the transaction remains profitable overall.
Last August, the Trump administration took a 9.9% equity stake in the chipmaker at a price of $20.47 per share, according to a company press release at the time.
That initial stake of 433.3 million primary shares was worth about $8.9 billion. The value shot up dramatically earlier this year, with Intel (INTC) closing on Thursday at $92.07 per share, implying a value to the US government of $39.9 billion.
But the stock took a beating overnight after Thursday night’s earnings report. It opened on Friday down over 25% at $68.35 per share, suggesting a new paper value for the government’s stake of about $29.6 billion.
65.82 -26.25 (-28.51%)
As of 10:22:39 AM EDT. Market Open.
The rapid price change underscores how government investments can take investors on a wild ride and presents a new challenge to a centerpiece of Trump’s government portfolio, which now spans 40 companies, according to a CATO Institute tracker.
A $100 billion loss for the company
Investors punished Intel after the Q4 revenue outlook fell short of Wall Street expectations as the company reported a worse-than-anticipated drop in PC revenue.
Intel is projecting fourth quarter revenue of $15 billion to $16 billion, well below the $17 billion analysts expected. The company is projecting earnings per share of $0.25 versus forecasts of $0.43.
That change in outlook led to losses that, at some points on Friday morning, put Intel on pace for its worst losses since 1974, as the company as a whole erased more than $100 billion in market value.
The government’s investment in Intel — which Trump has promised will yield outsized returns for taxpayers — is a running theme from the White House. In September, an image on Truth Social depicted the president as a stock trader in the Oval Office, with Intel’s price displayed on a screen at $95 per share.
Trump has previously exaggerated the gains, suggesting at one point, “I’ve made Hundreds of Billions of Dollars on Stocks, and many other type Holdings, for the U.S.A., not myself.”
Even so, the investment in Intel remains very profitable and is trading on Friday at about three times what the US paid for it.
Ben Werschkul is a Washington correspondent for Yahoo Finance.
