Intel stock was down -2.1% after news that the company plans to sell its NAND memory chip division to South Korean group SK Hynix for $9 billion in cash. SK Hynix will become the world’s number two in the sector – behind Samsung Electronics – with this transaction being its largest ever acquisition. The transaction reflects Intel’s desire to offload non-strategic assets to focus on its Optane memory chips in this segment. The American will therefore sell to SK Hynix, part of the SK Group conglomerate, its NAND chip business, including hard drives, components and wafers, as well as its factory in Dalian, China. Intel retains the more advanced Optane memory technology, developed with Micron. Intel’s NAND and Optane division suffered a fourth consecutive annual loss in 2019, but achieved profitability in the first half of the year.
IBM lost -6.5% post earnings. The group, which announced earlier this month its intention to split into two entities, reported third-quarter net income of $2.3 billion (down 3.7% year-on-year), representing adjusted earnings of $2.58 per share, up from $2.68 a year earlier. Sales fell 2.5% to $17.6 billion from $18.03 billion a year earlier, continuing a long decline, which saw sales decline in 29 of the last 33 quarters. These figures correspond to those already unveiled on October 8 by the group ($2.58 EPS for $17.6 billion), which announced on this occasion its intention to split, in order to focus on cloud services.
However, investors were disappointed on Monday by the lack of management forecasts due to the Covid-19 pandemic, as well as the lack of details on the future split. IBM has indicated its intention to move away from its managed infrastructure services arm to focus more on hybrid cloud and artificial intelligence. The split is expected to be completed by the end of 2021.
Pioneer Natural Resources (PNR) fell 4% following news that it is reportedly in talks to take over Parsley Energy (which rose 5%), a major independent oil producer in the Permian Basin. According to the Wall Street Journal and Bloomberg, the two players could formalize a 100% equity deal by the end of the month. The acquisition would increase Pioneer’s production in the area by more than 40% to approximately 558,000 barrels of oil equivalent per day.