The U.S. Government Is Preparing to Offload Over 9 Million GlobalFoundries Shares. How You Should Play GFS Stock in Response.

The U.S. Government Is Preparing to Offload Over 9 Million GlobalFoundries Shares. How You Should Play GFS Stock in Response.

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The federal government is preparing to cash out a chunk of its stake in GlobalFoundries (GFS). A new filing shows Washington plans to sell as many as 9.9 million shares of the semiconductor firm, months after agreeing to take an equity position in the company.

For investors watching GFS stock, the move raises questions about what comes next, even as GlobalFoundries lands new government-backed deals in quantum computing and silicon photonics. Here is what the filing means, and why the government owned shares of GlobalFoundries stock in the first place.

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Why the Government Owns GlobalFoundries Stock

The U.S. Department of Commerce has filed a registration statement to sell up to 9,907,399 ordinary shares of GlobalFoundries, according to a regulatory filing. The Commerce Department is listed as the selling shareholder, but it may also assign or transfer shares to third parties who would in turn become selling shareholders. The price and exact number of shares sold in any offering will reportedly be spelled out later. Notably, GlobalFoundries will not receive any proceeds from this sale.

The government's stake traces back to a deal announced in late July. Specifically, GlobalFoundries signed a letter of intent with the Commerce Department for a $300 million award to speed up research and development in silicon photonics, technology that moves data using light instead of electrical signals.

As part of the agreement, the Commerce Department received equity in GlobalFoundries representing about 1% ownership at the time, according to a statement. The idea, as Commerce Secretary Howard Lutnick put it, was to let "the American public […] share in GF's growth."

That equity stake sits inside a broader push by Washington to fund domestic chip manufacturing. The silicon photonics award followed the government's involvement through the CHIPS program, which has steered billions of dollars toward rebuilding chip production in the United States.

Even as the government moves to sell part of its stake, it has continued to back GlobalFoundries with fresh money elsewhere. On Sept. 8, GlobalFoundries announced that it had finalized a separate agreement with the Commerce Department's CHIPS Research and Development Office for up to $375 million to accelerate its Quantum Technology Solutions (QTS) business. The funding is tied to milestones and spread over five years.

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