Intel Corp (NASDAQ:INTC, ETR:INL) shares continued to gain momentum on Monday even after the company warned that the US government’s stake could pose risks to its business.
On Friday, the US government acquired a 9.9% stake in Intel by investing approximately $8.9 billion, marking one of the largest federal interventions in a US company since 2008, with an option to increase its stake by another 5% under specific conditions.
In a filing over the weekend, Intel said government ownership could harm its international sales, dilute existing shareholders, and complicate future federal funding.
The company raised concerns about shareholder dilution since the shares are sold to the government at a discount, priced at $20.47 per share versus a market price of $24.80, reducing the voting power of other shareholders.
Additionally, Intel noted that the government becoming a major shareholder could subject the company to additional regulations or restrictions, including foreign subsidy laws in other countries, which is significant since 76% of Intel's 2024 revenue came from outside the US, with 29% from China.
The filing also warned that the US government's stake might restrict Intel’s ability to pursue transactions beneficial to shareholders and that there is uncertainty whether this could prompt other governments or entities to convert grants into equity or withhold future grants.
Shares of Intel added 1.5% on Monday after surging more than 5% on Friday on the news of the government’s investment.
Separately, on Monday, US President Donald Trump said he would continue to make deals like the one involving the government acquiring a nearly 10% stake in Intel. He wrote on his social media platform Truth Social that he makes such deals "for the country all day long."