Intel Sued by Shareholders Over Fraudulent Concealment of Financial Problems
Intel, the Silicon Valley-based chipmaker, has been hit with a lawsuit by shareholders who claim the company fraudulently concealed problems that led to weak financial results, job cuts, and a suspended dividend. The proposed class action, filed in San Francisco federal court, alleges that Intel’s misleading statements about its business and manufacturing capabilities inflated its stock price before the truth was revealed.
According to the lawsuit, Intel’s foundry business, which makes chips for other companies, was struggling to turn a profit, despite costing billions of dollars more than expected. The company’s shares plummeted 26 percent to $21.48 on August 2, the day after it announced its quarterly results, job cuts, and dividend suspension.
The lawsuit comes after Intel announced plans to lay off over 15,000 employees, or 15 percent of its workforce, and suspend its dividend starting in the fourth quarter. The company is attempting to save $10 billion in 2025 through a restructuring effort.
Intel’s financial struggles have been ongoing, with the company struggling to compete with rival chipmakers such as Advanced Micro Devices, Nvidia, Samsung Electronics, and Taiwan’s TSMC. The company has also been affected by the decline in demand for personal computers and the shift towards cloud computing and artificial intelligence.
The case, Construction Laborers Pension Trust of Greater St. Louis v Intel Corp, is being heard in the US District Court, Northern District of California, and has the case number 24-04807.
This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.
