NASDAQ:INTC – Intel Acquires McAfee Online Security, Stock Drops 3%

In a move that has left both customers and investors baffled, chip maker Intel (NASDAQ:INTC) has acquired the online security firm McAfee for $7.68 billion, which stock analysts are saying is a premium price tag for McAfee.

What exactly does silicon chips have to do with online security?

And why is a firm (Intel), who’s market is measured in months and years, peddling around with McAfee who’s market responds minute by minute to new online security threats?

The acquisition just doesn’t make sense.

However, Intel’s president and CEO Paul Otellini, made a statement this morning stating that the acquisition was:

“driven by Intel’s belief that security has become a fundamental component of online computing, and with the rapid expansion of growth across a vast array of Internet-connected devices, more and more of the elements of our lives have moved online…¬†McASfee will bring incredibly talented people with a track record of delivering security innovations, products and services … [that are used to make] the Internet safer and more secure.”

Couldn’t Intel spend the $7.68 billion and just hire smart people to work at Intel?

Anyway, investors didn’t really appreciate the move and found almost no logic in the acquisition.

As a result, Intel’s stock price has dropped over 3% today.

Intel stock is currently trading at 18.94, -0.65 (-3.32%).

Thoughts?

via Computer World, Google Finance