Intel's worst day: billions wiped out and many workers in Israel affected

Intel experienced its worst trading day in 50 years after a disappointing forecast for the current quarter and the shutdown of its Kiryat Gat plant. The plunge erased billions of dollars from the value of shares held by employees, investment funds, and the U.S. government, the company's largest shareholder.

Intel experienced its worst trading day in over 50 years after releasing quarterly reports that beat expectations but were accompanied by a disappointing forecast for the current quarter. The company expects revenue of $15-16 billion, compared to analysts' forecast of $17 billion. Among the reasons: the October explosion at the Kiryat Gat plant, which shut down operations for two weeks and caused a $300 million hit to revenue, and a 2% erosion in gross margin to 37% due to higher memory chip costs. The stock plunge erased much of the gains recorded since the start of the year, but the stock still shows a positive return of nearly 70%. Intel employees in Israel, numbering fewer than 8,000, were affected by stock compensation: restricted stock units (RSUs) with a fair value of $28.12 are now trading at $65.76, so employees lost 'paper' profits but still benefit from the gain. The largest shareholders – the U.S. government (8.4%), BlackRock (6.8%), and Vanguard (6.5%) – lost huge sums on Friday: the government lost over $11 billion, BlackRock $9 billion, and Vanguard $8.6 billion. Despite the fall, Intel has 15 buy ratings, 30 holds, and five sells.