Pat Gelsinger’s plans for a comeback aren’t working out (yet?)
In a nutshell:Intel is actively seeking advice from investment bankers after a recent troubling earnings report.
The company is having difficulty navigating what insiders say is the most challenging time in Intel’s 56-year history.
Company heads are considering options, which include potentially separating its product design and manufacturing divisions.
Intel is in the early stages oftalkswith its longtime financial advisors, Morgan Stanley and Goldman Sachs Group.
Everything seems to be on the table, including cuts to capital expenditures and canceling some factory projects.
The company is even looking into mergers and acquisitions.
Shares were briefly surging, up 6.5 percent earlier this year, but plummeted 60 percent since then.
Intel posted a net loss of $1.61 billion in the last quarter.
Analysts predict more shortfalls are to come before year’s end.
Asymmetric Advisors Market Strategist Amir Anvarzadeh told Bloomberg that Intel’s business model is “effectively broken.”
He expects substantial capital expenditure cuts over the next 12 months.
“Intel’s model is effectively broken.
It’s fighting fires on too many fronts.”
Heplannedto expand the company’s manufacturing footprint, but declining sales hampered progress.
Intel recently announced itintendsto cut around 15,000 jobs.
It also wants to cut spending and suspend dividends, which will not likely yo shareholders.
His resignation further complicates the company’s efforts at a comeback.
Gelsinger’s plans to make manufacturing a cornerstone of Intel’s comeback strategy are likely dashed.
