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[winjer]

Intel faces shareholder class-action lawsuit for allegedly concealing foundry business problems

The Construction Laborers Pension Trust of Greater St. Louis, a Missouri-based pension fund, filed the lawsuit against Intel on behalf of other investors in a San Francisco...

www.techspot.com

Intel shareholders accuse company of hiding problems about its in-house chips manufacturing business ahead of announced layoffs and poor earnings

Intel shareholders accused the company of hiding problems about its in-house foundry business in a new lawsuit filed on Wednesday.

www.businessinsider.com

The Construction Laborers Pension Trust of Greater St. Louis, a Missouri-based pension fund, filed the lawsuit against Intel on behalf of other investors in a San Francisco federal court on Wednesday. The proposed class action names Chief Executive Officer Pat Gelsinger and Chief Financial Officer David Zinsner as co-defendants.

The suit claims that Intel hid problems relating to its chip-manufacturing business that led to it posting weak results, making mass layoffs, suspending its dividend, and causing its market cap to fall by $32 billion.

According to the lawsuit, Intel told investors that designing and manufacturing its own chips through its foundries would allow it to save $8 to $10 billion exiting 2025. "Unbeknownst to investors, however, Intel's foundry business was floundering, costing billions of dollars more than investors had been led to believe even while revenue growth in the division actually declined during the Class Period," the suit states, referring to a period from January 25 to August 1, 2024.

Intel recently reported revenue of $12.83 billion for the second quarter, down 1% from the previous year, missing analyst expectations of $12.94 billion. Chipzilla also revealed a $1.61 billion net loss and lowered its forecast for the current quarter, leading Gelsinger to call the Q2 financial performance "disappointing." Shares fell 26% in a single day to their lowest point since 2013, making it the worst trading day for Intel since 1974.

The suit also highlighted statements from the defendants that showed the "purported success" of Intel's business units, including its foundry model. The shareholders say that these statements were false and misleading, and failed to reveal that the foundry business was experiencing rising costs and more capital expenditures than investors had been led to believe, resulting in $7 billion in losses in 2023.

Intel's share price is currently at $18.99. It was close to $50 at the end of January, marking a decline of around 62% in just over six months.

In other Intel news, it's just been revealed that the company turned down the chance to acquire a 15% stake in OpenAI for $1 billion back in 2017 and 2018, potentially causing it to miss out on billions of dollars.

Intel just can't catch a break...

 

[Skifi28]

Intel just can't catch a break...

I'd say "poor intel" but everything has been pretty much their own fault so I just eat my popcorn while enjoying the show.

 

[The Cockatrice]

Intel just can't catch a break

They deserve it for all the shit they pulled. All companies do.

 

[winjer]

I'd say "poor intel" but everything has been pretty much their own fault so I just eat my popcorn while enjoying the show.

True, these are self inflicted wounds.
For a while I said that Brian Krzanich leadership was very bad, but Gelsinger's tenor as CEO of Intel might be even worse.

 

[Skyfox]

I bought a prebuilt with an i9 and I’m shafted now. First PC I ever bought.

Intel had the chance to do RMAs but they didn’t and the company that made it for me are giving me the run around.

I’ll be naming and shaming them on social media if they don’t get their act together.

 

[Shubh_C63]

I follow these news very briefly but first the 10nm struggle, and when they finally did managed it the product had manufacturing issues.
Still Intel will always remain on top because post 2010 world, you just can't bring down the giants anymore.

 

[Eimran]

Thanks OP. Buying another put contract on Intel.

 

[A.Romero]

I bought a prebuilt with an i9 and I’m shafted now. First PC I ever bought.

Intel had the chance to do RMAs but they didn’t and the company that made it for me are giving me the run around.

I’ll be naming and shaming them on social media if they don’t get their act together.

Shit man, sorry to hear that.

Are you suffering the symptoms reported online?

 

[GHG]

Pay up Leonidas

 

[{insert code here}]

Hold em to the fire. No bailouts, no shortcuts, nothing. They mismanaged the company into the gutter and so they need to be allowed to suffer the consequences.

I hope something good comes of this. Maybe one of the other tech companies (not AMD, Nvidia, or Qualcomm) will buy them and clean house (fire everyone in management).

 

[Spukc]

Poor intel

 

[SJRB]

Looking forward to the books and documentaries about this fumble of epic proportions.

 

[Sgt.Asher]

An entirely self inflicted wound.
"I can try upping the voltage, that's a neat trick" -Gelsinger probably

 

[Fake]

Leonidas Intel needs you.

 

[BlackTron]

Leonidas Intel needs you.

 

[peish]

such class action lawsuits happens all the time in the stock markets.

it is mainly by opportunistic small law firms seeking to make a name

 

[DeVeAn]

Bought 5 measly shares. In 20 years it will be worth $150 lol

 

[bender]

 

[Unknown?]

I hate how they're mismanaging the company. I prefer them because people have discovered how to disable their Intel Management Engine that runs beneath the OS and can see everything you do. AMD's equivalent feature cannot be disabled to my knowledge.

 

[SmokedMeat]

Let’s go Battlemage! We needed a third player in the GPU rac…OH WHAT THE FUCK INTEL!!!

 

[eNT1TY]

Their expert witness is too busy scouring the web for Zen 5 crash reports.

 

[Bashtee]

Intel's share price is currently at $18.99. It was close to $50 at the end of January, marking a decline of around 62% in just over six months.

HO HO HO, what the actual fuck? That's a drop, alright.
They slept too long on fab advantage and got caught off-guard by AMD with their chiplet design. Bonus points for missing the AI boom.

Intel missed literally every opportunity.

I hope within the 15k employees, there are a shit load of middle managers.

 

[Von Hugh]

Leonidas' Intel shilling increases as the stock value goes down. Can't make this shit up.

 

[Melon Husk]

such class action lawsuits happens all the time in the stock markets.

it is mainly by opportunistic small law firms seeking to make a name

If I had a nickel everytime a business got sued after "number go down", I'd have as much as the people who get checks from these lawsuits. A nickle.

 

[ReBurn]

quelle suprise

 

[Shake Your Rump]

Intel's revenue was down 1% YoY, only .11B below expectations, and this caused shares to drop 26%?

 

[StereoVsn]

Hold em to the fire. No bailouts, no shortcuts, nothing. They mismanaged the company into the gutter and so they need to be allowed to suffer the consequences.

I hope something good comes of this. Maybe one of the other tech companies (not AMD, Nvidia, or Qualcomm) will buy them and clean house (fire everyone in management).

Let’s not get ridiculous. US Gov will never let Intel die. They are almost the only company that has fabs which can be utilized for military chip requirements.

There is GF, but that’s on older nodes and owned by UAE. Everything else is either very small or outside continental US.

 

[Buggy Loop]

Intel's revenue was down 1% YoY, only .11B below expectations, and this caused shares to drop 26%?

Its also bad timing with tech going down since a month. Intel had actually a lot of resistance while the others were dwindling down, the fuck up with chipsets QA, no RMA, lawsuits, revenu down, etc at the report call just tipped the scale down.

AMD and Nvidia are hit. Nvidia down 18% in a month. AMD down 26.2%

 

[{insert code here}]

Let’s not get ridiculous. US Gov will never let Intel die. They are almost the only company that has fabs which can be utilized for military chip requirements.

There is GF, but that’s on older nodes and owned by UAE. Everything else is either very small or outside continental US.

Agreed and that's what's so frustrating. Intel doesn't have any incentive to put out good products because they know they have USgov backing. Why stay up late trying to solve difficult problems when you know you'll always get bailed out. Why work hard at all.

 

[ChorizoPicozo]

things can't be this bad... right?

 

[Frwrd]

 

[adamsapple]

 

[Mr.Phoenix]

So shareholders didn't sell when they should have... and are now claiming foul so they don't lose as much money as they have lost?

This reads like one of those things that normal people shouldn't care about...

 

[Chiggs]

For a while I said that Brian Krzanich leadership was very bad, but Gelsinger's tenor as CEO of Intel might be even worse.

And what's even crazier about that? Gelsinger's not some marketing sleazebag...he's an engineer.

And he still sucks.

things can't be this bad... right?

There is at least a 50% chance that Intel as we know it no longer exists 5 years from now. Things truly are that bad and people who have been watching the company for the last several years--especially when Gelsinger took over--know full well that's the cold, hard truth. AMD is relentless, ARM is coming with a number of worthy competitors, and things are bleak.

This is a crossroads moment for Intel, plain and simple.

 

[peish]

I trust Gelsinger, this is the final motions to bunker down. Intel shares crashing is because of the job cuts and the dividend cuts. He had to conserve his munitons, it is a long road to go before Intel foundaries overtake TSMC. It is coming!

Gelsinger had to start from scratch after decades of dumb non-engineering CEOs cruising along.

Wait for Sep Lunar lake will smash snapdragon in mobile efficiency.

Wat for Oct Arrow lake will beat 9800X3D in games.

 

[Dr.D00p]

Greed driven, parasite shareholders...fuck 'em.

 

[Chiggs]

I trust Gelsinger, this is the final motions to bunker down. Intel shares crashing is because of the job cuts and the dividend cuts. He had to conserve his munitons, it is a long road to go before Intel foundaries overtake TSMC. It is coming!

Gelsinger had to start from scratch after decades of dumb non-engineering CEOs cruising along.

Wait for Sep Lunar lake will smash snapdragon in mobile efficiency.

Wat for Oct Arrow lake will beat 9800X3D in games.

Hunker down is right, I guess.

Intel delays Innovation event to 2025 amid layoffs and uncertainties

But product launches remain untouched.

www.tomshardware.com

Greed driven, parasite shareholders...fuck 'em.

Like people with 401ks?

 

[Robb]

If they did indeed mislead people through their financial reports/hide vital information they deserve what’s coming.

 

[winjer]

And what's even crazier about that? Gelsinger's not some marketing sleazebag...he's an engineer.

And he still sucks.

The one positive thing he has done is to increase investment in R&D.
Most notably, the investment he made in High NA machines.

But the rest, has been screw up after screw up.

 

[YCoCg]

Don't Intel Open Inside?

 

[Life Diff]

 

[Holographicman]

Bought 5 measly shares. In 20 years it will be worth $150 lol

Don't worry! Society might collapse? You can trade them for food nomnom

 

[Hudo]

Intel just can't catch a break...

They don't deserve one.

 

[Griffon]

Agreed and that's what's so frustrating. Intel doesn't have any incentive to put out good products because they know they have USgov backing. Why stay up late trying to solve difficult problems when you know you'll always get bailed out. Why work hard at all.

I think Intel can still fall, the foundries could be span-off as its own separate entity and they would toss out the rest.

 

[ReBurn]

Intel's revenue was down 1% YoY, only .11B below expectations, and this caused shares to drop 26%?

Revenue is only one factor share in price. Some others are profitability, market conditions, and risk profile. The revelation that they have a huge, potentially unfixable issue with products they've sold is a big risk item for future margin. If they are forced to do a big recall that's going to impact shareholder equity and will be reflected in the share price. I would imagine a lot of people are wanting to get out of Intel stock before that happens, and that's also dropping the share price.

 

[Chiggs]

Let’s not get ridiculous. US Gov will never let Intel die. They are almost the only company that has fabs which can be utilized for military chip requirements.

Really depends on who is in office, and the Gov could just take control of the fabs and set up some contractor to run them.

 

[dave_d]

Like people with 401ks?

And pensions. (What did people think funded those?)

 

[StereoVsn]

Really depends on who is in office, and the Gov could just take control of the fabs and set up some contractor to run them.

That’s a terrible idea as serious R&D money, know how and cutting edge research are needed to maintain that.

A random contractor won’t do it. And I don’t see neither Trump nor Harris changing approach to US self sufficiency.

 

[Chiggs]

A random contractor won’t do it.

Totally agree, but there's plenty of non-random contractors...and the contractor could be brand new and staffed by key Intel personnel with DOD oversight.

Just spit-balling here, but the only point I want to make is that the government isn't married to the Intel brand; they're married to the fabs.

I'm still rooting for Intel but I won't latch onto false hope. I rid myself of all their shares 6 months ago.

 

[StereoVsn]

Totally agree, but there's plenty of non-random contractors...and the contractor could be brand new and staffed by key Intel personnel with DOD oversight.

Just spit-balling here, but the only point I want to make is that the government isn't married to the Intel brand; they're married to the fabs.

I'm still rooting for Intel but I won't latch onto false hope. I rid myself of all their shares 6 months ago.

This is a dumb idea and nothing you said here makes it less dumb.

Intel, the company that has been working on chip making and owned fabs for last 50+ years ran into some serious issues and you think breaking it up and giving pieces to some random parties with zero experience with modern fab manufacturing processes will work???

Ok, then.