5 Private Investors Get Shafted As The U.S. Takes 10%…

5 Private Investors Get Shafted As The U.S. Takes 10% Of Intel

The biggest private investors in Intel are now second fiddle.

The U.S. took a 10% stake in the troubled chipmaker — hoping to shore up a viable U.S.-based semiconductor manufacturer. The investment makes the U.S. government the largest owner of Intel, based on an Investor's Business Daily analysis of ownership data from S&P Global Market Intelligence as of Aug. 21.

And that's a potential knockdown for the five private investors who own the biggest stake of the company now. And those investors are primarily large ETF providers such as BlackRock, Vanguard Group, State Street Global plus UBS Asset Management and Geode Capital.

Some are concerned that the nationalization of the chipmaker isn't what will fix Intel. "I've been around this business for a long time, and I've never seen the government make a savvy investment when they get involved in the private sector," said Nancy Tengler, CEO and CIO at Laffer Tengler Investments.

Knocking Down Private Investors

When it comes to owned the most of Intel prior to the U.S.' move, it's a close call between BlackRock and Vanguard. BlackRock, which manages the iShares ETFs, holds a $9.2 billion stake in the company accounting for 8.9%. Until the U.S., no one owned a larger slice of the company.

And BlackRock is followed by Vanguard, which owns $9.1 billion of the company in a stake worth 8.8% of the total. Both would get knocked down in the ownership structure second to the U.S. government.

Is Nationalization The Answer?

The way Intel's stock is going, you're not going to find many investors clamoring to buy it. Shares have essentially gone nowhere in 10 years.

Some might be happy Japan's SoftBank says it plans to put $2 billion into the company for a 2% stake. But getting the U.S. government involved might not pan out as many would like.

"Generally speaking, Intel is so far behind on the technology that it may serve some purpose, but I don't see the benefit to the American taxpayer, nor do I see the benefit, necessarily to the chip industry so let the private sector take over. They'll fix the problems quickly," Tengler said.