Why would a company with $13 billion of cash and $5 billion of free cash flow file to sell $1 billion-worth of stock at $15 a share?
Because it thinks the stock is wildly overvalued.
This would be news to many Intel analysts and investors, of course, who have been screaming about how the stock is a raging buy “down here.” It also appears to be a recent revelation for the company, which was blowing shareholder cash buying back stock in the $20-$25 range not so long ago.
How overvalued would Intel have to think its stock is to sell $1 billion of stock at this level with that mountain of cash already on hand?
By 50%, maybe?
Perhaps Intel thinks its stock will soon join hundreds of its S&P 500 brethren in experiencing the previously unthinkable territory below $10.