[skynetv2]

They are not returning money to shareholders, they are artificially inflating the stock price through short term band aids like dividend. If you are suffering an existential crisis, you try to invest all you can in positioning yourself to be successful in the long run. If I am an investor, and I am, I want long term return on the full value of my investment, not a $1 dividend on a stock I bought for $40, which is not worth anywhere near it now.

This is the same nonsense Pat's predecessors did, laid off long term experts in manufacturing & design and replaced them with fresh grads. And see how where we are.

[btilly]

Sorry, you don't appear to understand how stocks actually work.

The market cap of a company is an estimate of its value. The value includes things like current assets, expected present value of future profits, and so on. If it pays out $X, to first order effects, investors have $X more money, the company has $X less in assets, and so is worth $X less than it was. This is literally a redistribution of current market value back to investors.

At the level of a stock, the result is that a dividend of $Y will normally DROP the price of the stock by $Y. This is the exact opposite of "inflating" it.

Now I said to first order. What would be a second order factor? Well a large part of the value of a company comes from an estimate of the present value of future returns. Paying a dividend is literally an admission on the part of management that they do not think that they can spend the money and get returns matching other investments (ie the stock market). And therefore it is in the interests of investors that the money be returned. If this admission comes as a surprise to investors, this may change expectations of the future and drop the stock price even further. But unless the money being returned is from an unexpected windfall, the second order effects are unlikely to be positive either.

As an investor you should rightly see the fact of the money being returned as a bad sign for the future. However if you understood the chip industry deeply, it shouldn't come as a surprise. Your theory and preference appears to be that Intel should roll the dice on a Hail Mary to have a chance of a revival that keeps your losses from being permanent. But given the headwinds that they face, returning money and winding down operations in an orderly fashion may well give the best possible returns for investors. Which is what management appears to have concluded.

Hence return money that they can return, cut overhead with a layoff, and expect more of the same going forward. Anyone who invests in Intel expecting them to do anything else is probably throwing good money after bad.

[jefftk]

A dividend is literally giving money to shareholders. Each shareholder receives money in proportion to the number of shares they hold: https://www.nasdaq.com/market-activity/stocks/intc/dividend-...

[thefaux]

Semantically, sure, they are giving money back but the OP has a reasonable point that a dollar given back today may ultimately cost far more than a dollar in lost future returns.

[btilly]

It can go either way.

Management should give money back when they do not think that they can generate future returns with it that are worth more to investors than the money. If management is right, then attempting to keep the money is taking value away from shareholders.

Given my knowledge of Intel's situation, I believe that management is making the right call here. We've known for decades that CISC based architectures don't scale as well. For a long time Intel compensated by investing enough to be able to iterate faster despite their advantages. But now ARM has taken over mobile, and is moving into data centers. Intel lost, they can't invest enough to overcome their innate disadvantages.

This isn't news, but there is a huge chunk of x86 out there. Unfortunately they've lost their moat on that to AMD. AMD now has better designs and more money to put into research. AMD also has outsourced manufacturing to TSMC, which (because they also build lots of ARM devices) has better economies of scale and manufacturing than Intel can hope match. And even if Intel tried to copy AMD here, there is a long learning curve to working with outsourced manufacturing that Intel would have to go through.

The result looks pretty grim. There is not one area in which Intel has an institutional advantage. And there is every reason to believe that Intel is not long for the world. Therefore extracting maximum value from current assets is probably their best management strategy. Rather than engaging in wishful thinking about a return to their former glory.