Intel is currently facing a lawsuit from shareholders who claim that the company provided false information regarding the status of its in-house manufacturing business for chips.
Accusations of Hiding Problems
The lawsuit alleges that Intel did not adequately warn investors about the challenges within its foundry business, which eventually led to significant layoffs and financial losses.
Mass Layoffs and Financial Losses
Recently, Intel announced a substantial reduction of its workforce by 15,000 jobs following a reported net loss of $1.6 billion in the second quarter.
Struggling to Compete
Once a leader in the chips industry, Intel has been struggling to keep up with competitors like Nvidia, particularly in the GPU sector amid the AI competition.
Legal Action and Allegations
The lawsuit, filed in a San Francisco federal court, names CEO Patrick Gelsinger and CFO David Zinsner as defendants, accusing them of misleading statements that inflated the company's stock price.
Challenges in Foundry Business
Intel's in-house manufacturing of chips, which was meant to save billions by 2025, reportedly faced significant cost overruns and revenue decline, contrary to what was communicated to investors.
Response and Analysis
Intel declined to comment on the lawsuit, while experts suggest that the case includes typical allegations in securities litigation, with Intel likely to defend its statements as forward-looking and protected by law.
These accusations shed light on the challenges faced by Intel in its manufacturing business and the potential impact on investors misled by the company's statements.
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By: lloydlee@insider.com (Lloyd Lee)
Title: Intel Shareholders Accuse Company of Misleading Statements About In-House Chips Manufacturing Business
Sourced From: www.businessinsider.com/intel-shareholders-lawsuit-foundry-business-chips-layoffs-2024-8
Published Date: Thu, 08 Aug 2024 02:32:15 +0000
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