The United States is taking a 9.9% stake in Intel through an $8.9 billion purchase of common stock. The investment could dilute existing shareholders because stock is being issued at a discount and dilution could increase if the government buys more shares. The deal could reduce the voting power of current shareholders and potentially make the US the largest stockholder, creating interests that may not align with other investors. The investment could negatively affect international business operations and constrain future funding options. Companies commonly disclose such risk factors to limit litigation exposure.
It's a rare deal in which the government is taking a financial stake in a publicly traded company. Intel, which has been working on a turnaround, announced the deal on Friday, saying it reflected "the confidence the Administration has in Intel to advance key national priorities and the critically important role the company plays in expanding the domestic semiconductor industry."
In a Monday filing to the Securities and Exchange Commission, the company outlined a number of "risk factors" related to the US government's investment, from negative impacts on shareholders to hindering future opportunities. Companies often add to their risk factors to fend off litigation - these sections can run for pages in quarterly filings, addressing everything from cyberattacks to pandemics.
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