TSEM - Wall Street Breakfast Podcast: Intel Axes Tower Semi Acquisition

2023-08-16 06:38:39 ET

Summary

• Intel terminates acquisition of Tower Semiconductor after failing to obtain regulatory approvals.
• VinFast's stock soars after completing a merger deal, despite being behind competitors in EV production.
• First Solar slides after audit reveals labor violations in Malaysian factory.

Listen below or on the go on Apple Podcasts and Spotify Intel ( INTC ) Intel axes Tower Semiconductor acquisition after not getting China nod Tower Semiconductor ( TSEM ) acquisition after not getting China nod. (00:22) Electric vehicle maker Vinfast ( VFS ) Electric vehicle maker Vinfast skyrockets in Nasdaq debut in Nasdaq debut. (01:08) First Solar ( FSLR ) slides after audit finds forced labor in Malaysian factory. (02:03)

This is an abridged transcript of the podcast.

Intel (NASDAQ: INTC ) and Tower Semiconductor (NASDAQ: TSEM ) mutually agreed to terminate the proposed acquisition of Tower as they were unable to get the required regulatory approvals in a timely manner.

?Intel ( INTC ) will pay a termination fee of $353M to Tower (TSEM).

The termination of the Tower ( TSEM ) deal was expected, after the companies failed to win Chinese approval before the deadline expired, which was the main obstacle to completing the deal.

Intel CEO Pat Gelsinger said Intel’s “respect for Tower has only grown through this process, and we will continue to look for opportunities to work together in the future.”

The company also highlighted its recent deals with Synopsys ( SNPS ) and U.S. Department of Defense, as well as a multigenerational agreement with Arm (ARMHF).

Vietnamese electric vehicle maker VinFast (NASDAQ: VFS ) soared Tuesday after the company closed its merger deal with Black Spade Acquisition Co in Asia's biggest M&A deal this year.

VFS closed at $37.06, an increase of nearly 70%.

The market cap of Vinfast ( VFS ) on its debut was higher than the current valuations of Nio (NIO), Rivian Automotive (RIVN), and Lucid Group (LCID), despite the automaker being behind competitors in bringing EVs to production in major markets.

Vinfast ( VFS ) disclosed that it had 26K electric vehicle reservations as of June 30 and 12 showrooms opened globally. Global EV deliveries for the first half of the year were 11,300 vehicles. Annual capacity is currently at 300K.

Premarket VFS is down more than 7%

First Solar (NASDAQ: FSLR ) lost ground by 5.5% in Tuesday's trading after saying an independent review found subcontractors used unethical recruitment tactics and withheld pay from workers at its operations in Malaysia which employed foreign migrant workers.

First Solar ( FSLR ) said the audit, which was included in a corporate sustainability report , found that four subcontractors in Malaysia had engaged in the practices.

U.S. officials and human rights activists have become increasingly concerned about the use of forced labor to manufacture solar panels, which occurs mostly in Asia.

The company said it is requiring the four subcontractors to change how they treat workers and agree to periodic reviews by First Solar ( FSLR ) to ensure they are no longer using forced labor.

Other headlines to look out for on Seeking Alpha:

Phillips 66 to lay off 275 office workers in latest cost-cutting move

Silvergate Capital CEO to depart in next phase of crypto bank's wind-down

Esmark CEO says he has cash for U.S. Steel deal

U.S. stocks on Tuesday slumped to a negative finish, after July retail sales came in stronger than expected, leading to concerns that the Federal Reserve would have to keep interest rates elevated.

Sentiment was also weighed down by losses in the financial sector following a downgrade warning from Fitch.

The Nasdaq ( COMP.IND ) slipped 1.14%. The benchmark S&P 500 (SP500) retreated 1.16%, while the Dow ( DJI ) fell 1.02%.

All 11 S&P sectors ended in negative territory, led by a more than 2% drop in Energy on the back of declining crude oil (CL1:COM) prices due to worries over China.

Financials declined 1.8%, after Fitch cautioned that the credit ratings of several U.S. lenders, including some of the nation's biggest banks, were at risk.

More on Fitch and July’s retail sales numbers on Tuesday’s Wall Street Lunch with Kim Khan.

Treasury yields continued to remain volatile, with the recent bond sell-off accelerating earlier in the day and driving the more rate-sensitive 2-year yield (US2Y) to a session high of 5.02%. The 10-year yield (US10Y) gained 4 basis points to 4.22%, while the 2-year yield (US2Y) was down 2 basis points to 4.95%.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are pointing higher. The Dow is up 0.1%, the S&P 500 is up 0.1% and the Nasdaq is up 0.2%. Crude oil is down 0.4% at more than $80 a barrel. Bitcoin is down 0.8%.

In the world markets, the FTSE 100 is down 0.4% and the DAX is up 0.1%.

Our biggest stock movers for the day premarket: DLocal Limited (NASDAQ: DLO ) is up more than 25% after the company outperformed analysts' expectations in Q2.

And for one of the biggest losers, Despite stronger than expected Q4 earnings results, Coherent (NYSE: COHR ) is down more than 21% on a downbeat outlook .

On today’s economic calendar at 830 am housing starts and permits and at 2pm the FOMC minutes will be released.

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