After Intel's share price suffered a sharp pullback, CEO Lip-Bu Tan stepped in to increase his stake, sending a certain signal of confidence to the market.
According to a Form 4 filing submitted to the U.S. Securities and Exchange Commission (SEC), Lip-Bu Tan purchased 150,000 shares of Intel common stock in the open market on November 2, with a transaction value of approximately $9.71 million.
The weighted average price of this purchase was $64.7312 per share, and the transaction was completed through a family trust. The filing shows that after the transaction, the family trust's holdings of Intel stock increased to 1.4647 million shares, up about 11.4% from before the transaction.
After the news was announced, Intel's share price briefly rebounded and climbed, with its decline from the intraday high narrowing to 1.2%, before slightly pulling back. As of publication, it was still down 3.6% in Wednesday trading.
This increase in holdings came after Intel's share price suffered a severe sell-off. Last Friday, Intel's stock plunged 28.6% in a single day, one of its largest one-day declines in decades.
Intel had previously issued fourth-quarter guidance that was significantly below market expectations, intensifying investor concerns about its supply capacity, profit outlook, and capital expenditure pressure.
The company expects fourth-quarter revenue to be between $15 billion and $16 billion, below analysts' previous estimate of about $17.07 billion; adjusted earnings per share are expected to be $0.25, also below the market expectation of $0.43. The company also said that factors such as weakness in the PC market, limited chip supply, and the shutdown of its factory in Israel will continue to weigh on the business, and it expects not to achieve positive free cash flow this year.
The amount of Lip-Bu Tan's purchase this time was close to $10 million, and it was an open-market transaction rather than stock compensation or option exercise.
For investors, management continuing to put in personal funds after a sharp share price pullback may be seen as a sign that they still have confidence in the company's long-term prospects. However, whether Intel can overcome its supply bottlenecks, improve profitability, and deliver on growth expectations for its manufacturing business and AI chip business remains the key to the stock's future performance.
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