Intel Is Selling $15 Billion of Stock to Fund the AI Build-Out. The Dilution Is About 3%. The Premarket Hit Was 5%.
The market's first reaction was bigger than the stake shareholders are actually giving up. What does the sale say about the build-out?
Overview
Before Monday's open, Intel (NASDAQ: INTC) announced a $15 billion sale of new common stock -- an underwritten offering, with an option for the banks running it to buy up to $2.25 billion more. Shares fell almost 5% in premarket trading on the news, and they were still lower, at around $98 as of this writing.
The reaction is understandable. A stock sale means more shares outstanding, and more shares mean each existing one owns a smaller slice of the company.
Details
But the size of the drop is worth setting against the size of the sale. Intel's market value is about $500 billion, so $15 billion of new stock hands away about 3% of the company.
Source
Originally published at www.fool.com.