The lawsuit alleges that Intel fraudulently concealed problems that led it to post weak results and suspend its dividend.
sued by shareholders who said the Silicon Valley chip maker fraudulently concealed problems that led it to post weak results, slash jobs and suspend its dividend, and caused its market value to sink more than US$32-billion in a single day., CEO Pat Gelsinger and chief financial officer David Zinsner was filed in San Francisco federal court on Wednesday.
Shareholders said they were blindsided when Intel revealed on 1 August that its so-called foundry business for making chips on contract for outsiders was in their words “floundering”, costing billions of dollars extra even as revenue declined.They said the Santa Clara, California-based company’s materially false or misleading statements regarding the business and its manufacturing capabilities inflated its stock price from 25 January to 1 August.
The company has struggled to fend off competition from rival chip makers and benefit from growth in artificial intelligence. Among its rivals are AMD, Nvidia, Samsung Electronics and TSMC. Intel’s share price tumbled 26% to $21.48 on 2 August, the day after it announced quarterly results, the job cuts and the dividend suspension. The shares closed on Wednesday down 3.6% at $18.99 and have fallen 34.6% since the announcement. —
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