Intel Shares Explode as Activist Daniel Loeb Calls on Company to Do This

Intel saw its shares heading higher on Tuesday after Wall Street learned that Third Point activist investor Daniel Loeb has acquired a big stake in the company.

According to a Reuters report, Third Point has taken a $1 billion stake in the chip maker.

Loeb is also pushing for Intel to explore strategic alternatives and has urged the company to hire an investment adviser to help it determine if it should remain an integrated device manufacturer and if it should divest some of its recent acquisitions.

According to a letter written by Loeb and viewed by CNBC, it is important for Intel to keep customers like Apple, Microsoft, and Amazon and to not let them send their manufacturing overseas. He has suggested that Intel offer new solutions to retain these customers rather than have them send their manufacturing away.

Loeb also noted that Intel has lost out to TSMC, Samsung and AMD. “The loss of manufacturing leadership and other missteps have allowed several semiconductor competitors to leverage TSMC’s and Samsung’s process technology prowess and gain significant market share at Intel’s expense,” Loeb wrote.

He additionally added that AMD has eaten away at Intel’s share of its “core PC and data center CPU markets.”

“Without immediate change at Intel, we fear that America’s access to leading-edge semiconductor supply will erode, forcing the U.S. to rely more heavily on geopolitically unstable East Asia to power everything from PCs to data centers to critical infrastructure and more,” Loeb also said.

Intel said it would work with Third Point on its ideas to increase shareholder value.

“Intel Corporation welcomes input from all investors regarding enhanced shareholder value. In that spirit, we look forward to engaging with Third Point LLC on their ideas towards that goal,” said the company in a statement.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.