Blue-Chip Stock Inches Higher as Billion-Dollar Buyout Rumors Swirl

The deal could ramp up Intel's semiconductor production while demand is high

Deputy Editor
Jul 16, 2021 at 9:55 AM
facebook twitter linkedin


The shares of blue-chip tech name Intel Corporation (NASDAQ:INTC) are inching higher this morning, last seen up 1.9% at $56.87, amid news that the firm is in talks to purchase semiconductor manufacturer GlobalFoundries Inc for $30 billion. According to a Wall Street Journal report, the deal does not seem to directly include GlobalFoundries, after a spokesperson said the company is not currently in communication with Intel. The buyout would help accelerate chip production during a period of high demand and short supply, as the tech name looks to begin manufacturing chips for auto makers. 

It's been a choppy road for the blue chip, which has yet to fully recover from its late-April bear gap to the $53 level. The equity has since been consolidating below a stiff ceiling at its $58 level, though the 320-day moving average looks to have provided support over the past month. Year-to-date, INTC is up 12%. 

While options traders are still picking up calls over puts, sentiment has been a bit more bearish than usual of late. This is per INTC's 10-day put/call volume ratio, which stands higher than 66% of readings at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX).

And while the equity's Schaeffer's Volatility Index (SVI) of 34% stands in the 60th percentile of its 12-month range, suggesting options are hardly a bargain right now, its Schaeffer's Volatility Scorecard (SVS) sits at 81 out of a possible 100. This means INTC tends to exceed these options traders' volatility expectations, which might be a good thing for buyers. 

Celebrate 40 Years of Schaeffer's With 4 FREE Stock Picks!


 




 
Special Offers from Schaeffer's Trading Partners