The US government recently acquired Intel's shares, which has caused some investors to worry, and believes that the transaction may imply that the Trump administration will intervene in more deeply in private enterprises, and this highly remote relationship is not a typical interaction between enterprises and the Chinese government.
According to the agreement, the United States transfers USD 1.11 billion in the Chip and Science Act subsidies and other government funds to 9.9% of Intel's shares. In the Intel news, it also includes support statements from executive executives of companies such as WeChat and Dale. At the same time, US President Trump also said in social media that in order to maintain his position, Intel Executive Chairman Chen Liwu "finally gave us $10 billion to the United States."
James McRitchie, a California private investor and shareholder, believes that if the president can directly take 10% of the company's shares through threatening the executive, it will set a very bad precedent. This statement is basically equivalent to a message: "We love Trump, and we don't want 10% of our company to be taken away."
According to the agreement, the US government will purchase 433.3 billion new shares of Intel at a price of US$20.47 per share, equivalent to 9.9%. Intel emphasized that the investment of the US government, as "passive investment", will not enter the company's board of directors and will not enjoy the right to disclose information. However, the U.S. Department of Commerce is still free to vote on many other proposals.
Fitch Ratings believes that transactions do not help improve Intel’s BBB credit rating (only first-level above the “Spam Rating”). Although this will increase liquidity, it will fundamentally not improve the market demand for Intel chips.
In addition to Intel, Shirata acquired shares in a mining company through military transactions in July and gained influence in the process of purchasing US Steel in Japan. U.S. Commerce Secretary Howard Lutnick also revealed that the Trump administration may hold stakes in defense contractors in the future.
Rich Weiss, senior vice president and investment director of diversified asset strategies of investment institutions, pointed out that future federal investments must formulate regulations and guidelines to limit the occurrence of economic situations such as internal transactions. In the absence of supervision, government direct investment will make transactions of these companies more risky to investors.
In fact, many investors and industry representatives also mentioned similar risks. When the board of directors needs to make decisions between different interests, including the establishment of a new factory, the establishment of a postponement, or the expansion of the overseas market, in this case, it is easy for the company and the national goals to conflict.
Robert McCormick, executive director of the Council of Institutional Investors, said that the government's holdings in a private enterprise may create a contradiction between the interests of the company and the interests of the country; Kristin Hull, the investment director of another investment company, believes that the boundary between the government and the private sector is being blurred.
Unknown large-scale institutional investors warn that if the U.S. government continues to hold shares in other companies, it could create a "national capitalism" that, if it becomes a more common method, it must be examined why this tool is used and why the capital market does not provide financing methods.
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