US-listed semiconductor company Intel’s corporate venturing will sell up to 10 million of its shares in its biggest investment, the wireless broadband services provider Clearwire.
Intel Capital’s sale of about a tenth of its 102.4 million shares in Clearwire, which is 32.8% of the total stock, will help it to realize tax benefits.
In a filing with US regulator Securities and Exchange Commission, the world’s biggest chipmaker said it periodically rebalanced its equity portfolio based on its goals, the performance of stocks in its portfolio, and the evaluation of market conditions.
Intel added WiMAX, a wireless form of communication provided by Clearwire, continued to be strategically important and the sale of the shares would not affect any contractual obligations or business arrangements between the chip maker and Clearwire.
Separately, Intel and Clearwire, which is majority-owned by phone operator Sprint Nextel, had been victims of an insider trading trial by hedge fund manager Raj Rajaratnam.
Rajaratnam, founder of Galleon Group, remains free on bail until sentencing on July 29 and faces 15.5 to 19.5 years in federal prison after being found guilty of 14 conspiracy and securities fraud charges of insider trading on Wednesday.
Rajiv Goel, a former employee at Intel’s treasury department, pleaded guilty to insider trading and testified that he sought earnings information from a contact in investor relations for Rajaratnam in April 2007 and also provided regular updates about investment plans by Intel Capital.
One of the alleged incidents reported by news provider Financial Times involved discussions of the details of Intel’s planned $1bn investment in wireless broadband company Clearwire the day after the chipmaker’s board approved the transaction and weeks before the deal was publicly announced, according to recordings of phone calls played at his trial.
The calls were between Rajaratnam and Goel on March 20 2008, in which they discussed the deal terms. The day before, Intel’s board had approved the investment by Intel Capital, the firm’s investment arm, in a Sprint Nextel tie-up with Clearwire.
In one recording, heard in court and published by the FT, Goel asked: "Did you digest the information I gave you?"
Rajaratnam and Goel discussed Intel’s $1bn investment in Clearwire, the terms of the deal and names of other strategic investors, including Google and Comcast. They also discussed that Clearwire’s board would consist of 13 members. None of the information, an Intel executive testified, was publicly disclosed.
Goel also testified that Rajaratnam bought shares of @Road for him after learning from the company’s chief executive that it would be acquired.