Intel Wins Dismissal of Shareholder Lawsuit

Intel Wins Dismissal of Shareholder Lawsuit

Court Ruling on Fraud Allegations

A U.S. District Judge in San Francisco dismissed a shareholder lawsuit against Intel, which accused the company of fraudulent concealment of issues in its foundry business. The lawsuit claimed these issues led to job cuts and a dividend suspension, resulting in a significant market value loss.

Dispute Over Financial Disclosure

The lawsuit alleged that Intel delayed revealing a $7 billion operating loss in fiscal year 2023 related to its chip manufacturing services. However, the judge ruled that shareholders incorrectly linked the loss to Intel Foundry Services and were not misled about financial reporting changes.

Statements by Former CEO

Former Intel CEO Patrick Gelsinger had previously stated that the company was seeing “significant traction” and “growing demand” for its foundry services. The court determined these statements were not misleading, as they referred to specific customers rather than overall revenue trends.

Impact on Stock and Workforce

Between January 25 and August 1, 2024, Intel’s stock was allegedly inflated. On August 1, Intel announced a $1.61 billion quarterly loss, along with plans to lay off more than 15,000 employees and suspend its dividend to cut costs. The next day, Intel’s stock fell by 26%, wiping out $32 billion in market value.

Challenges in the Semiconductor Industry

Intel continues to face challenges in the competitive semiconductor industry, struggling against rival chipmakers and shifting market trends driven by artificial intelligence.

Next Steps in the Case

Although the lawsuit was dismissed, the judge allowed plaintiffs to file an amended complaint, leaving open the possibility of further legal action.

“Intel Wins Dismissal of Shareholder Lawsuit” “Intel Wins Dismissal of Shareholder Lawsuit”