I've been swing trading Intel for several months now with great success. Price patterns were consistent, that is, before the US government decided to take up ownership.
I did a bit of digging into their recent 8-K and found the following:
"…the terms of the Purchase Agreement are subject to unilateral amendment by the DOC to comply with future changes in federal law."
The US gov can unilaterally change the deal! The deal signed today might be completely different in a year or two, and Intel wouldn't be able to do anything about it.
"Further, the Company's receipt of funds depends on the availability of appropriations from the legislative branch of the U.S. government and the ability of the executive branch of the U.S. government to obtain funding and support contemplated by the transaction."
Funding is NOT GUARANTEED! This was insane to read. Intel is giving away shares now but the cash payments aren't guaranteed. This means whether or not Intel will actually receive the money will depend on future gov budgets and politics.
"To the extent any Escrowed Shares have not been released from escrow… half of any remaining Escrowed Shares will be released from escrow to DOC at such time with no additional consideration payable to the Company…"
Also insane is that if Intel doesn't meet its goals to get the full $3.17 billion, the government still gets half of the leftover shares for free. Intel gets no money, but the government still gets stock.
"…provided further that no such restrictions or obligations on DOC's voting shall apply… with respect to any vote… seeking to reject, disclaim, unwind, terminate or otherwise materially and adversely impact the Company's or its subsidiaries' relationship with the US Government…"
The government promises to vote with Intel's board, but this exception lets them vote against the board on issues that might hurt government interests. Crazy overstep IMO.
What are your thoughts on all of this?
Is INTC no longer good to swing trade? A risk analysis
byu/ppkao inoptions
Posted by ppkao
1 Comment
Yeah not exactly a good deal. I think there’s a support level in short term as the current administration don’t want the appearance of investing in losing company so there will be policy/EO that would keep it above a certain level but unless the company can really attract customers to IFS it’s going up any time soon. I think it’s going to be bouncing around this $20-25 for a while. I being selling puts on this one around the short term resistance level since the beginning of the year and so far so good.