Intel Corporation’s stock plunged to historic lows on Friday, reaching a price level unseen since 2013. The dramatic selloff came on the heels of a dismal earnings report and the announcement of a sweeping restructuring plan aimed at steering the chipmaker back to profitability.

Intel’s stock plummeted 26% to close at $21.48, marking its second-worst day on record. The only more significant drop occurred in July 1974, when shares fell by 31%, three years after Intel’s IPO. This latest decline has slashed the company’s market capitalization to below $100 billion, a stark indicator of the challenges it faces.

Intel’s financial results for the quarter were nothing short of bleak. The company reported a net loss of $1.61 billion, a dramatic reversal from the $1.48 billion net income recorded in the same period last year. Adjusted earnings per share fell to a mere 2 cents, significantly below analysts’ expectations of 10 cents. Revenue also missed projections, underscoring the depth of Intel’s current struggles.

Intel has announced drastic measures, including suspending its dividend for the fiscal fourth quarter of 2024 and reducing its full-year capital expenditure forecast by over 20%. The company also revealed plans to lay off more than 15% of its workforce as part of a $10 billion cost-reduction initiative.

“This is the most substantial restructuring of Intel since the memory microprocessor transition four decades ago,” Intel CEO Pat Gelsinger told CNBC’s Jon Fortt in an interview that aired on Friday. “We have laid out an audacious journey of rebuilding this company, and we’re going to get that done.”

Intel’s decision to accelerate the production of Core Ultra PC chips, designed to handle artificial intelligence workloads, played a significant role in the quarterly loss. The company also faced intense pricing pressures from competitors like AMD, Qualcomm, and others, who have been steadily eroding Intel’s market share, particularly in the AI sector.

Layoffs and Broader Market Challenges

The job cuts, the largest listed on industry tracker Layoffs.fyi since its inception in March 2020, will primarily occur this year, according to Gelsinger. This move signifies a major shake-up as Intel attempts to regain its competitive edge in a rapidly evolving market.

However, the semiconductor market troubles touch other players, although in other ways. A report from The Information revealed that AI chipmaker Nvidia is under investigation by the U.S. Department of Justice for potential antitrust violations. The DOJ is reportedly examining complaints that Nvidia abused its market dominance in AI.

In response to the investigation, a spokesperson for Nvidia stated, “We compete based on decades of investment and innovation, scrupulously adhering to all laws, making NVIDIA openly available in every cloud and on-prem for every enterprise, and ensuring that customers can choose whatever solution is best for them.”

The spokesperson added that Nvidia is “happy to provide any information regulators need.”

The selloff reverberated through global markets. SK Hynix, a major supplier to Nvidia, saw its shares fall sharply, closing more than 10% lower. In Europe, shares of ASML, a key supplier of equipment for advanced chip manufacturing, along with STMicroelectronics and Infineon, also declined.

The VanEck Semiconductor ETF, which includes major sector players, dropped 5.5% on Friday, following a 6.5% decline the previous day.

Intel’s Troubles Far From Over

While the entire American stock market is in disarray, Intel’s predicament is particularly concerning. The company’s steep decline in stock value and its extensive restructuring efforts highlight that its troubles are far from over.

Intel reported a loss of $1.6 billion for Q2 2024, a significant increase from the $437 million loss in the previous quarter.

“Our Q2 financial performance was disappointing, even as we hit key product and process technology milestones,” Gelsinger admitted.

Although the company achieved critical milestones, revenues have not grown as anticipated, and Intel has yet to fully capitalize on emerging trends such as artificial intelligence (AI).

Investors have been critical of Intel’s financial performance, as the company has oscillated between losses and profits over the past two years, resulting in a cumulative gain of just $1.1 billion between Q2 2022 and Q1 2024. Intel has been the worst-performing tech stock in the S&P 500 this year, as noted by CNBC.

In a rather amusing turn of events, the Kaduna State Internal Revenue Service (KADIRS) has announced the sealing of the Kaduna Electricity Company Plc (Kaduna Electric) office due to unpaid taxes amounting to N600 million.

The announcement, made on the service’s X page on Friday, August 2, 2024, highlighted the enforcement of tax compliance as per Section 104 (1) & (4) of the Personal Income Tax Act, 2011, and Section 37 (3) & (4) of the Kaduna State Tax Codification and Consolidation Law, 2020.

Zakari Jamilu Muhammad, Head of Corporate Communications for KADIRS, explained that the sealing of Kaduna Electric’s business premises was conducted based on a court order.

“The Service secured a court order for the immediate closure and taking over of the company’s property until all unpaid taxes are settled,” Muhammad stated.

The Dramatic Response from Kaduna Electric

In an unexpected twist, the Kaduna Electricity Distribution Company (KEDCO) retaliated by disconnecting the electricity supply to the Kaduna Government House over an outstanding debt of N2.9 billion. According to Abdulazeez Abdullahi, KEDCO’s Head of Corporate Communication, the government house had not paid for electricity consumed over the past seven months.

Abdullahi revealed that extensive efforts to resolve the issue through consultations and reconciliations were unsuccessful, leading to the disconnection.

“The outstanding balance for electricity consumed from January 2024 to July 2024 alone amounts to a staggering N1.166 billion. Including historical debt, the State Government’s total outstanding debt stands at N2.943 billion,” Abdullahi noted.

Despite a payment of N256 million made on May 9, 2024, for electricity consumed between September 2023 and December 2023, the state’s debt remains substantially high. KEDCO explained that the decision to disconnect power was a last resort after all other avenues had been exhausted.

The disconnect notice was formally issued on July 21, 2024, and received by the Office of the Governor on July 22, 2024. This move underscores the company’s need to meet its financial obligations amidst broader challenges in the electricity sector.

Other states under the Kaduna Electric franchise, including Sokoto, Kebbi, and Zamfara, have maintained good standing with their accounts and regularly meet their electricity payment obligations, according to the DisCo.

The development follows the financial troubles of Kaduna Electric, which has made it insolvent. On July 13, the Nigerian Electricity Regulatory Commission (NERC) approved the acquisition of a 60% equity stake in Kaduna Electric by ASI Engineering Limited.

NERC had six months earlier, revealed in a report that the electricity distribution company had a debt of N110 billion ($130 million) owed to various entities, including the Nigerian Bulk Electricity Trader and power generation firms.

The regulator had previously intervened by installing an Administrator and Special Board to oversee Kaduna Electric during its transitional period before the current investors’ official takeover. The Administrator committed to an agreement with KADIRS to pay N20 million monthly, including statutory monthly tax payments, which has been honored since the current management took over.

Also, the Kaduna State government is looking for funds to execute projects, after revealing that former governor Nasir El-Rufai left a staggering debt of $587m and N85bn for the state.

This drama marks a critical juncture in the ongoing tensions between utility providers and state governments, reflecting broader challenges in Nigeria’s electricity sector. DisCos are being owed huge amounts of money by several state governments, even though many of the electricity distributors are struggling to stay afloat.

Against this backdrop, the public and stakeholders are keen to see how the parties will resolve the matter. Many have suggested that Kaduna Electric should subtract

However, the irony of the situation is hard to miss: a state government sealing off an electricity company’s office for unpaid taxes, only to have its own government house disconnected from the power supply for unpaid electricity bills. It’s a comedy of errors that has kept many giggling amid Nigeria’s biting social-economic challenges.

The market is red and please pay attention. Yes, the world may be at the early phase of stock market correction.

The last major global correction was in 2008. Another was coming in 2020, but we disintermediated it with stimulus packages, flipping scarcity with artificial abundance. Now that Biden is not on the ticket, I am not sure he has any personal political survival interest to delay the inevitable. Simply, do not expect any quantitative easing: this stock routing may take its full course.

Look at your job and pay attention because the first phase is always using hard working people to try to fight Wall Street, as Intel just did by firing 15,000 people. Snap, the parent of SnapChat, is largely lost now, and is in big trouble.

Bank stocks may also be in the crosshairs considering that many commercial real estate deals are expected to go bad, and if this recession hits, residential mortgages and credit cards will follow. Shine your eyes and stop any fandom spending and conserve cash!

These are trending topics on X (Twitter) which do indicate that markets may be heading for correction.

On August 2, 2024, global financial markets experienced a significant downturn, with over $2.9 trillion wiped out from stocks due to growing fears of a global recession. This marked the worst day for stocks since the COVID-19 pandemic crash in March 2020. The volatility index (VIX) spiked by 54%, one of the largest one-day moves in history, indicating heightened market uncertainty. The U.S. unemployment rate rose to 4.3% in July, with only 114,000 jobs added, both figures falling short of expectations. Gold prices hit a record high as investors sought safe-haven assets amidst economic instability and corporate earnings concerns.

The S&P 500 (SPX) experienced a significant downturn, dropping 4.5% from the July 24th gap, sparking discussions among market analysts and traders. The VIX, a volatility index, surged by 13.7 points from its low on August 1st, reaching its peak on August 2nd, a level last seen in January 2022, January 2021, and June 2020. Despite the downturn, the S&P 500 is still up by nearly 13% year-to-date. Market participants are closely monitoring support levels and potential targets for the SPX, with key levels identified at 524, 5150, and 5200. Opinions among traders vary, with some anticipating a bounce back while others expect further declines.

The U.S. unemployment rate rose to 4.3% in July, marking a significant increase from the previous month and reaching the highest level since October 2021. This surge in unemployment was accompanied by a slowdown in job growth, with only 114,000 jobs added in July, significantly below the forecasted 175,000 gain. The labor market’s cooling has raised concerns about the economy’s vulnerability to a recession, with some sources suggesting that the unemployment rate may be higher than officially reported. The Federal Reserve’s future actions regarding interest rates are being closely watched in light of these developments.

On August 2, 2024, U.S. stocks experienced a significant downturn, marking the worst session since 2022. The decline was triggered by a weaker-than-expected U.S. jobs report for July, which indicated a slowdown in hiring and an increase in the unemployment rate to 4.3%, the highest in nearly three years. Major indices, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, saw substantial drops. The losses were substantial, with over $2.9 trillion wiped out from major indices and stocks, marking the worst day for stocks since March 16, 2020, during the COVID-19 pandemic. This event has heightened fears of a potential recession and has led to significant market volatility.

On August 2, 2024, the financial markets experienced significant movements in various commodities. Silver, gold, and platinum saw gains, with silver being the only asset in the green for the day. Crude oil prices plummeted to an 8-month low, influenced by weak US jobs data and concerns over Chinese economic performance and global manufacturing slowdowns. Grain markets ended the week on a mixed note, with corn, soybeans, and wheat closing higher, while cattle and hog futures ended lower. The financial community closely monitored these developments, reflecting on the implications for global economic health and market stability.

Over $2.9 trillion has been wiped out from major indices and stocks this morning due to growing fears of a global recession.

This is the worst day for stocks since March 16, 2020, during the COVID-19 pandemic fears.

Intel experienced its worst trading day in 50 years, with its stock price plummeting by 26% after announcing a 15% workforce reduction, affecting 15,000 employees. This move is part of a cost-cutting strategy aimed at saving $10 billion by 2025. The company’s struggles are attributed to its inability to compete effectively in the AI chip sector, where rivals like Nvidia have gained significant market advantage. Additionally, Intel’s failure to develop and produce 7nm chips has been highlighted as a contributing factor to its declining market position. The layoffs and financial challenges come despite Intel receiving an $8.5 billion grant from the Chips Act, which was intended to bolster the semiconductor industry in the United States.