Daniel Loeb, the influential activist investor and CEO of hedge fund Third Point, is pushing for changes at chip giant Intel (NASDAQ:INTC). Loeb articulated these in a letter sent to the chairman of the company's board, Omar Ishrak, on Tuesday.
Claiming that the company is effectively ceding its once dominant position to Asia-based rivals and onetime customers like Apple, Loeb wrote that Intel's board should "evaluate strategic alternatives." Among other requests, he is urging the company to determine whether it should continue its traditional core activity of chip manufacturing and to consider jettisoning some of its recent acquisitions
Also, "From a governance point of view, we cannot fathom how the boards who presided over Intel's decline could have permitted management to fritter away the company's leading market position while simultaneously rewarding them handsomely with extravagant compensation packages," ValueWalk.com quoted Loeb as writing in the letter.
"Stakeholders will no longer tolerate such apparent abdications of duty," he continued. It was not clear how ValueWalk.com obtained the letter, which neither Third Point nor Intel has made public.
Intel responded to the missive in a tersely worded press release reading, in its entirety: "Intel Corporation welcomes input from all investors regarding enhanced shareholder value. In that spirit, we look forward to engaging with Third Point LLC on their ideas toward that goal."
As an activist investor, Third Point takes small stakes in companies it considers to be underperforming, and attempts to shift their strategies to "unlock" value in their shares.
Reuters, which broke the story early on Tuesday, cited "people familiar with the matter" saying that Third Point has accumulated a stake of almost $1 billion in Intel.
The company's stock has been a laggard in 2020, declining by over 17% year to date.