Intel Faces Shareholder Lawsuit Over Foundry Business Misrepresentation

Santa Clara, CA – Intel Corporation is under legal scrutiny as shareholders have filed a class-action lawsuit against the tech giant. The lawsuit, led by the Construction Laborers Pension Trust, claims Intel misled investors. It alleges inaccuracies about the financial health and performance of Intel’s foundry business.

Allegations and Claims

The shareholders claim that Intel made materially false or misleading statements regarding the profitability and growth of its foundry services. The lawsuit claims Intel did not disclose significant operating losses and declining product profits within its foundry division, which the company only revealed after restructuring its reporting segments in early 2024.

Impact on Investors

The alleged misrepresentation led to a significant drop in Intel’s stock price, causing substantial financial losses for investors. The lawsuit highlights that Intel’s stock plummeted by 26% in a single day following the disclosure of the foundry division’s poor performance. This decline was exacerbated by Intel’s announcement of major layoffs and the suspension of its dividend.

Company Response

Intel has yet to comment on the lawsuit. The company is currently facing increased competition from other chipmakers like AMD, Nvidia, and TSMC, which has further strained its financial performance.

Future Implications

This lawsuit could have significant implications for Intel’s corporate governance and investor relations. Proving the allegations could result in them facing substantial financial penalties and losing investor confidence, which may impact its long-term strategic plans.