Intel to Expand Share Sale to $20 Billion as Demand Tops $100 Billion

TradingKey - Intel ( INTC) is considering further expanding the size of this stock offering.

Bloomberg reported on Tuesday that the company currently plans to increase the size of its common stock offering to approximately $20 billion, up about one-third from the initial target of $15 billion announced on Monday. Since the relevant discussions have not yet been finalized, the actual offering size and pricing may still change.

According to people familiar with the matter, the pricing for Intel's offering could be at $95 per share or higher. At this price, it would represent a discount of approximately 6.5% to last Friday's closing price. Market demand for the transaction is currently robust, with subscriptions already exceeding $100 billion. The total proceeds could increase further if underwriters ultimately exercise their over-allotment option.

An Intel spokesperson declined to comment. The offering is being underwritten by JPMorgan ( JPM ), Goldman Sachs ( GS ), Morgan Stanley ( MS) and Citigroup ( C) are serving as underwriters. As subscription demand is significantly higher than initially expected, the company is evaluating plans to expand the size of the financing.

Following the announcement, Intel's shares fell approximately 4.1% during regular trading on Monday and edged lower after-hours. So far this year, Intel's stock has risen about 164%, with a cumulative gain of nearly 400% over the past 12 months. The sharp rise in the share price has provided the company with a favorable financing window, but it also means the stock offering may bring some equity dilution pressure.

Source: Google Finance

Intel has been working to improve its balance sheet in recent years, funding its business transformation through external capital. After Chief Executive Lip-Bu Tan took office, improving the company's financial health became one of his key focuses, and the company has successively sought participation from the U.S. government and external investors like Nvidia. With growing AI-related demand, Intel also hopes to leverage its current high market valuation to fund capital expenditures for the coming years.

From the perspective of the financing environment, Intel's decision to issue stock rather than further expand its debt is also related to its balance sheet situation. The company is currently carrying high debt, and some of its assets have already been monetized through sales or external investments. Therefore, the room to continue relying on debt or asset disposals to raise large-scale capital is relatively limited. Under these circumstances, raising long-term capital through an equity offering has become a more direct option for the company.

This year, large-scale equity financing transactions in the U.S. market have been mainly concentrated in AI-related companies. Alphabet previously announced a stock financing plan of up to $85 billion, and Oracle ( ORCL) also introduced a stock offering plan of approximately $20 billion. Intel's expansion of its stock offering size reflects that investment in AI infrastructure continues to drive companies to raise large amounts of long-term capital.