Cash Rich, Asset Poor?
I saw a headline celebrating Intel’s “strengthened balance sheet” with $30.9 billion in cash. It sounds safe. It sounds robust.
But where did this cash come from? It wasn’t earned.
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$5.7 billion from Government grants (taxpayer money).
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$2 billion from SoftBank (private equity injection).
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$5 billion investment from Nvidia (strategic dilution).
The Leverage Trap
The Debt-to-Equity ratio sits at 0.44, which seems manageable until you realize the “Equity” part is inflated by goodwill and the “Debt” doesn’t count the future obligations to these “partners.”
They are celebrating liquidity that was purchased by selling future profits. This isn’t a fortress balance sheet; it’s a credit card limit increase. Why do we celebrate borrowing money as if it were earning money?