Intel Stock Drops on Report U.S. Chips Act Funding Could Convert to 10% Equity Stake

Intel has been expecting $10.9 billion worth of grants from the Chips Act. (Annabelle Chih/Bloomberg)

Intel stock fell in midday trading Monday in the wake of a report indicating that the Trump administration is considering converting grants from the Chips Act into an equity stake in Intel owned by the Federal government.

Intel stock was down 3.2% on the report from Bloomberg, which is sourced to a White House official and other people familiar with the matter.

The White House didn’t immediately respond to a request for comment from Barron’s about the report. Intel declined to comment to Barron’s.

The report would be costly for Intel shareholders, with $10.9 billion in grants on the table from the Chips Act. That sum would buy 442 million new shares at Friday’s closing price, which would raise the share count by more than 10% and reduce per-share earnings accordingly.

Grants from the Chips Act came with significant strings attached, but direct equity stakes weren’t cited in the law.

Write to Adam Levine at adam.levine@barrons.com