WebProNews

Tag: daniel loeb

  • Intel Willing to Work With Third Point Hedge Fund

    Intel Willing to Work With Third Point Hedge Fund

    Intel has signaled it is willing to work with Third Point hedge fund to improve its business.

    As we reported earlier today, Third Point’s CEO sent a letter to Intel’s chairman urging changes as the chipmaker lags behind rivals.

    “Without immediate change at Intel, we fear that America’s access to leading-edge semiconductor supply will erode, forcing the U.S. to rely more heavily on a geopolitically unstable East Asia to power everything from PCs to data centers to critical infrastructure and more,” CEO Daniel Loeb wrote.

    According to International Business Times, It appears Intel is open to discussion with Third Point in an effort to make changes.

    “Intel Corporation welcomes input from all investors regarding enhanced shareholder value,” the California tech giant said. “In that spirit, we look forward to engaging with Third Point LLC on their ideas towards that goal.”

  • Intel’s Troubles Mount As Hedge Fund Urges Action

    Intel’s Troubles Mount As Hedge Fund Urges Action

    Third Point LLC, an activist hedge fund, is urging Intel to make changes to address its falling status in the chipmaking industry.

    Once the undisputed leader in chipmaking, Intel’s processors were used in everything from mobile devices to PCs to servers. Unfortunately for the company, it failed to keep up with changes in the industry, especially with the rise of mobile processing.

    Designed by Arm Holdings, ARM chips are known for their outstanding performance to power consumption ratio. ARM-based chips power iPhones, iPads, Android devices and, most recently, computers. In the case of Apple’s Mac platform, the ARM-based M1 offers superior performance to comparable Intel chips while using a fraction of the energy. The result are machines that run cooler and have much longer battery life.

    Intel, in contrast, has struggled to offer that winning combination of performance and efficiency. The company struggled to move to 7nm processors, has had issues keeping up with demand and been plagued with “unfixable” security issues. The company has also lost some of its best engineers, including Jim Keller and Murthy Renduchintala.

    To make matters worse, AMD has been chipping away at some of Intel’s stronghold markets, especially with its Ryzen line of chips. The Ryzen 3000 took aim at the desktop, the 4000 series made headway in the mobile market and the 5000 is challenging Intel in the gaming market. Meanwhile, the Threadripper Pro is challenging Intel’s server dominance.

    Intel’s issues have reached the point where the company is even considering outsourcing its chip production.

    Third Point CEO Daniel Loeb wrote to Intel’s chairman, Omar Ishrak, urging the company to take action to address its issues, according to Reuters.

    “Without immediate change at Intel, we fear that America’s access to leading-edge semiconductor supply will erode, forcing the U.S. to rely more heavily on a geopolitically unstable East Asia to power everything from PCs to data centers to critical infrastructure and more,” Loeb wrote.

    One of the suggested remedies was “separating its chip design from its semiconductor fabrication plant manufacturing operations, according to the sources. This could include a joint venture in manufacturing, according to the sources.”

    It’s unclear if Intel will respond, although Third Point’s nearly $1 billion stake in Intel could make it hard to ignore. Either way, one thing is clear: Intel must figure out a way to turn its business around before it’s too late.

  • Yahoo Hopes to Combat Activist Shareholder Third Point

    The leadership at Yahoo thinks it can ward off a challenge from activist shareholder Daniel Loeb of Third Point, by aggressively courting three new board members to replace the five that are leaving.

    The internet giant has already filled two of the five open slots, but now the company is scrambling to bring on the final three, at the face of increasing proxy pressure from Third Point. Still, according to several sources, Yahoo CEO Scott Thompson has said that the threat from Third Point, which own 6% of the company, is not as substantial as some might think.

    Yahoo’s headhunting firm Heidrick & Struggles has been reaching out to some high-profile media executives about joining the company’s board, who include former News Corp executives Peter Chemin and Tony Vinciquerra, and former MTV boss Judy McGrath.

    Sources indicate that Chemin and Vinciquerra have already turned down their offers, amidst a potential proxy battle and other changes taking place.

    Loeb, known for writing public letters concerning his disapproval of fellow financial executives, has submitted a preliminary proxy filing with the Securities and Exchange Commission, to make a case that Yahoo should add his own people from his Third Point hedge fund to the board, including former NBC head Jeff Zucker. Loeb’s filing came after discussions with Thompson went nowhere, to make Third Point’s board selections public.

    If Yahoo names new directors, this would be an affront to Loeb and Third Point, which might lead to a ground battle for investor votes.