U.S. Government Plans to Invest Billions Dollars into Softbank, According to Intel
In a significant move for the tech industry, SoftBank, the Japanese conglomerate, has announced a strategic investment of $2 billion in Intel, the U.S. chipmaker. This investment reflects SoftBank's belief in the continued growth of advanced semiconductor manufacturing and supply in the U.S., with Intel playing a crucial role.
Masayoshi Son, SoftBank's CEO, commented that semiconductors are the foundation of every industry, and Intel has been a trusted innovator for over five decades. The deal, which was announced overnight Monday to Tuesday, marks a significant boost for Intel's shares, which had fallen around 3.6% in regular trading on Monday due to a Bloomberg report.
Following the announcement, Intel's stock jumped over 5% in after-hours trading, indicating a positive market response to the news. However, there is a caution from analysts about the potential risks of the investment for Intel. Investors are holding their positions and securing them with a stop-loss at $15.00.
The investment in Intel is worth $23 per share. Under President Joe Biden, Intel is expected to receive substantial subsidies, amounting to around $8 billion from a semiconductor industry funding bill. The U.S. Government is reportedly considering an investment in Intel, with the potential deal involving Intel transferring shares to the government in exchange for state aid. If the deal were to go through, Intel would receive nearly $11 billion in subsidies, approximately the value of over 10% of Intel's currently traded shares.
It's worth noting that the president leading the U.S. government’s talks with Intel about a possible investment was Donald Trump. The investment in Intel is a testament to the ongoing support for the U.S. tech industry from both political parties.
Intel's stock remains a topic of ongoing speculation among investors. With SoftBank's investment and the potential U.S. government investment, Intel is poised for continued growth and innovation in the semiconductor industry.
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