The share price of Intel dropped almost 30% on Friday, shaving over $11 billion from the US government’s stake in the company, though the transaction remains profitable overall.
Last August, the Trump administration took a 9.9% equity stake in the chipmaker at a price of $20.47 per share, according to a company press release at the time.
That initial stake of 433.3 million primary shares was worth about $8.9 billion. The value shot up dramatically earlier this year, with Intel (INTC) closing on Thursday at $92.07 per share, implying a value to the US government of $39.9 billion.
But the stock took a beating on Friday after the company reported earnings on Thursday night. The stock closed Friday down about 29% at $65.76 per share, suggesting a new paper value for the government’s stake of $28.5 billion.
65.76 -26.31 (-28.58%)
At close: October 30 at 4:00:01 PM EDT
64.89 -0.87 (-1.32%)
The rapid price change underscores how government investments can take investors on a wild ride and presents a new challenge to a centerpiece of Trump’s government portfolio, which now spans 40 companies, according to a CATO Institute tracker.
A nearly $150 billion loss for the company
Investors punished Intel after its Q4 revenue outlook fell short of Wall Street expectations and the company reported a worse-than-anticipated drop in PC revenue.
Intel is projecting fourth quarter revenue of $15 billion to $16 billion, well below the $17 billion analysts expected. The company is projecting earnings per share of $0.25 versus forecasts of $0.43.
That change in outlook led to losses that, at some points on Friday morning, put Intel on pace for its worst losses since 1974, as the company as a whole erased nearly $150 billion in market value.
The government’s investment in Intel — which Trump has promised will yield outsized returns for taxpayers — is a running theme from the White House. In September, an image on Truth Social depicted the president as a stock trader in the Oval Office, with Intel’s price displayed on a screen at $95 per share.
Trump has previously exaggerated the gains, suggesting at one point, “I’ve made Hundreds of Billions of Dollars on Stocks, and many other type Holdings, for the U.S.A., not myself.”
Even so, the investment in Intel remains very profitable and still ended the day on Friday more than three times what the US paid for it.
This story has been updated.
Ben Werschkul is a Washington correspondent for Yahoo Finance.
