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The plan has caused investor alarm, first because it suggests that Intel doesn’t see these investments delivering required returns, second because it underscores a general perception that start-up valuations have been too high, and third because it will put publicly visible valuations on assets which, if low, will drive down the value of all start-up investments.
With the bubble bursting for formerly highly valued start-ups like Powa and Theranos, the VCs of this world are dreading a mass collapse of valuations.
Apparently Intel wants to make it as easy as possible for buyers of its assets – being prepared to sell them by region, by sector, by technology-type or as a whole.
You wouldn’t think Intel is selling because it needs the cash. Although it has debt of $20 billion it has cash of $25 billion.
Mind you, Intel does have some expensive plans up ahead – like fabs to make 3D X-Point, 3D NAND and 10nm logic each of which will require different tool-sets.
Intel Capital has had some spectacular cock-ups like losing $1 billion on its investment in the Wimax-based start-up wireless network Clearwire. At the time WiMAX was seen as a competitive technology to LTE. It was the wrong bet.
Having invested $11.4 billion in start-ups since 1991, it will be interesting to see what the Intel Capital portfolio is worth now
Wimax may have lost the fight against LTE as the 4G technology, and rightly so as LTE is better for Smartphone applications, but it’s still very much alive for its original application of broadband delivery to rural locations. Main problem in Europe is there’s no exclusive frequency band allocated to its use by smaller operators and although BT bought some spectrum supposedly for rural delivery, as usual with BT little has followed and it looks like they are sitting on the allocation to eventually extend mobile usage once more.