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Intel Gets Vote of Confidence From Dan Loeb's Third Point

Third Point will be a long-term shareholder of Intel, Dan Loeb said in a letter to the hedge fund's investors.
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Intel  (INTC) - Get Intel Corporation Report received a vote of confidence from Third Point, the hedge fund led by Dan Loeb, as the firm said that it would be a long-term shareholder in the chipmaking icon. 

Third Point made the declaration in a letter to investors expressing confidence in Intel's new chief executive, Pat Gelsinger, according to Bloomberg, which reviewed the letter. 

“Once Gelsinger has successfully regained Intel’s position as the premier microprocessor vendor in the world, we believe the opportunity for additional shareholder value creation is enormous,” Loeb said. 

Loeb said that Intel has the potential to "capture the full unbounded growth of this market opportunity." He also updated investors on the 16.1% return from the hedge fund's flagship Offshore Fund. 

In mid-January, Intel said that CEO Bob Swan would step down on Feb. 15 and would be succeeded by Gelsinger, VMware's  (VMW) - Get VMware, Inc. Report former CEO. 

Intel stressed that the move was not an indictment of the company's financial performance in 2020. 

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“After careful consideration, the board concluded that now is the right time to make this leadership change to draw on Pat’s technology and engineering expertise during this critical period of transformation at Intel," said Omar Ishrak, Intel’s independent board chairman, in a statement.

About a week after announcing the management change, Intel reported fourth-quarter results that were ahead of analyst estimates.

The Santa Clara, Calif., company reported earnings of $1.52 a share on revenue of $20 billion. Analysts were expecting earnings of $1.10 a share on revenue of $17.5 billion.

“We significantly exceeded our expectations for the quarter, capping off our fifth consecutive record year,” Swan said. 

"Demand for the computing performance Intel delivers remains very strong and our focus on growth opportunities is paying off."

Intel shares at last check were little changed at $58.79.