Shares of Intel (INTC) are rising on media reports that the microchip developer has become a takeover target.
Shortly before markets closed last Friday (Sept. 20), The Wall Street Journal published an article saying that rival chipmaker Qualcomm (QCOM) has expressed interest in a takeover of Intel.
The article cited unnamed sources claiming that Qualcomm has approached Intel about a potential takeover. Neither company has responded publicly to the report.
Intel’s stock was up as much as 7% immediately after the Journal article was published. Qualcomm’s stock fell 5% in extended trading.
Reports of a potential takeover come as Intel and its stock continue to struggle.
After disappointing financial results for this year’s second quarter, Intel recently announced plans to spinoff its foundry business that makes microchips for other companies into a subsidiary.
Intel has also announced the elimination of 15,000 jobs and suspended its quarterly dividend payment to shareholders.
The moves come after Intel spent heavily to pivot its business from designing microchips to also manufacturing them.
Although Intel has spent about $50 billion U.S. over the last two years to shift its corporate direction, the foundry business has yet to takeoff.
Prior to today (Sept. 23), Intel’s stock had declined 55% this year and was the second worst performer in the benchmark S&P 500 index after Walgreens Boots Alliance (WBA).
Qualcomm’s stock has gained 20% year to date and currently trades at $168.92 U.S. per share.