Stepping Out of Intel

We - are young but getting old before our time
We'll leave the TV and radio behind
Don't you wonder what we'll find
Stepping out tonight
--Joe Jackson

There is little in the corporate world that I detest more than levering up to buy back stock. Earlier this week Intel (INTC) announced that it was selling ~$6 billion of debt, primarily to repurchase shares. Looks to me that this will place INTC's balance sheet in a net negative cash position--probably for the first time in its history.

A bullish thesis for stocks here is that cheap borrowing costs put a floor under share prices as companies float low coupon debt and buy back stock with the proceeds. Buying back shares is a losing proposition in general, and especially so when a) stocks are generally overvalued, and b) you weaken the balance sheet to do so.

I don't want to own a company that engages in such foolishness. As such, my small INTC position is being held for sale.

position in INTC