Intel saw a 2.38% increase in its pre-market trading on Monday, following reports of a potential multi-billion dollar investments from Apollo Global Management and a takeover interest from Qualcomm.
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00:00Let's start with Intel today.
00:03We talked about Intel last week, of course, getting that deal with Amazon as well as the
00:08government funding, shooting the stock higher, gave it a lifeline.
00:11Now the stock is trading up again on news of an investment offer from Apollo and Qualcomm.
00:18This would be for about $5 billion of an investment coming in from Apollo teaming up with Qualcomm
00:25here.
00:26The stock up now 5% a buck, continuing to run this morning.
00:32All rumors yet though, AB, correct?
00:34We haven't got any full offers on the table type deal.
00:39These are all rumors, correct?
00:41Yeah, it's speculation.
00:43Nothing's confirmed.
00:44Yeah.
00:45It's a speculative acquisition.
00:46They're just kind of throwing out rumors right now.
00:49Nothing-
00:50A lot of rumors.
00:51Lots of people circling.
00:53Intel's beaten up.
00:54The one thing that I tweeted and I'm going to continue to say is, why does Qualcomm want
00:58to buy Intel, the whole company?
01:00What I could see happening, just my opinion, I don't have any inside details or anything
01:05like that, but I'm just giving my opinion because people come to listen to our opinions
01:09on stocks.
01:12Intel for one, and I own Intel and I own Qualcomm, I own them both in the long-term portfolio.
01:17I don't want this deal, but that's besides the point.
01:20But I asked myself, why are they going to do this deal?
01:23It'd probably be good for me because my Intel stock, I'm sure I'd like to get bought over.
01:26My Intel stock would come back, but I don't think it's going to happen and here's my reasons
01:30why.
01:31Is one, Intel has $48 billion worth of debt on a market cap of $93 billion.
01:36They're cash burning right now because obviously they're trying to dump so much into the foundry
01:41business and maybe it's going to be a huge cash flow in the future, maybe 2030, we're
01:46talking about a completely different company, but it's going to take some work to get there.
01:51This would just screw up if they went and just bought Intel, just at face value and
01:55let's say they did a stock deal to buy them, just hypothetical, I don't think it's going
01:58to happen.
01:59The balance sheet on Qualcomm is awesome, $108 billion stock, $13 billion in debt.
02:03Basically very little debt here in this business.
02:05PE is good, business is still doing well.
02:08So that's why, why go and buy Intel, screw up your balance sheet and you have all these
02:14headaches of trying to turn this business around.
02:17What I could see happening is them just sniffing around and maybe trying to buy some of their
02:20good assets.
02:21And this is what Intel's done before, spinning off this or doing that.
02:26I mean, they need some money because they obviously don't want to continue to do the
02:30foundry business, but they're burning cash right now.
02:32So they need money.
02:34So it's not a secret that they need money.
02:36But when you need money, the vultures usually don't just give you money for nothing.
02:40They're going to probably be taking and usually doing you not the greatest deal in the world.
02:45So it wouldn't surprise me if they bought some assets from Intel, maybe some of the
02:48better assets and left them with a bunch of crap.
02:51So this is why I don't think Intel is going to get taken over.
02:55Apollo going to give them some money, 5 billion, maybe, maybe they'll want a piece.
02:59But Apollo isn't just out there just to, hey, Intel, this is 5 billion.
03:03You know, okay, good.
03:04You know, you go do something good with it.
03:06They're going to want some type of sweetheart deal too.
03:09So anybody that's coming to Intel with a handout is going to want a really sweetheart deal.
03:12They're probably going to get a really good deal because Intel is kind of a little bit
03:16more desperate than people like to believe.
03:18So I think by paying up 5% here for today, I'm thinking it's going to go to $30 because
03:26half the people on Twitter last night were looking, oh, Intel's going to 30.
03:29It's going to go way up here.
03:31It's not going to 30, folks.
03:32Sorry to disappoint.
03:33I don't think it's getting taken over for 30.
03:35I don't think it's going to 30.
03:36I'm long the stock.
03:37I hope it goes to 30.
03:39I don't think it's going to happen.
03:40So I'm talking about fundamentals aside, you have a great technical setup here.
03:45First, I want to mention the volume on Friday.
03:48I mean, you found some believers on Friday.
03:51Now, it might be a little distorted because it was a quad witch, but you traded a blockbuster
03:58260 million shares, piling in the direction where the stock was up.
04:04Some of that Matt had to do with perhaps a quad witch, but the volume aside, we'll see
04:10what kind of volume we get today.
04:12But the moment of truth will happen at 2314 today.
04:162316 is your pre-market high.
04:20Your high from Friday is 2314.
04:23You have absolutely no business being short that stock.
04:27I don't know about exiting along, of course.
04:29There's nothing in there, folks.
04:31There's nothing in there.
04:33And they can come out and, you know, Qualcomm can lowball them.
04:37They can come out and say, okay, we'll buy you at 25.
04:39They're going to lowball them.
04:40They'll lowball them.
04:41And we'll take this or that.
04:44So just technically, boom, you got your pre-market high.
04:48It's actually, is that your after hours high?
04:50No, that was your high from Friday.
04:53That's your pre-market high.
04:55Let's see if the big boys can get a solid 23 bid here and take it up.
04:59I don't know about filling the gap.
05:01If you want to be patient, let the news kind of settle down and everyone take their short-term
05:06profits that bought it under 21 and then see if it, you know, it settles back in maybe
05:11that 22, 22 and a quarter, but right now seems to see strong bid.
05:16Let's see if we can take out Friday's high.