Intel’s quarterly report, which was accompanied by decisions on austerity measures and the cessation of dividend payments, caused a sharp decline in the company’s stock price. As a result, its capitalization decreased by more than $32 billion in just one trading day. A number of shareholders subsequently had claims against the issuer and filed a lawsuit.
Image source: GlobalFoundries
A federal court in San Francisco, as noted by Reuters, this week accepted a lawsuit from a group of Intel shareholders in which they accuse the corporation and its leaders in the person of CEO Patrick Gelsinger and CFO David Zinsner of concealing information about the true deplorable financial situation of the company. First of all, the revelation for them was the deep unprofitability of the Intel Foundry division, which, according to the plaintiffs, is literally “floundering” and losing billions of dollars. According to the prosecution, Intel misled its investors about the true state of affairs in the period from January 25 to August 1 of this year.
Let us recall that at the end of the last quarter, the company’s revenue decreased by 1% to $12.83 billion, while it received a net loss of $1.61 billion. Cost reductions and savings in capital expenditures should allow it to save up to $10 billion by 2025, but for the sake of this, among other things, will have to cut 15,000 employees, or about 15% of the workforce. Since the publication of the disastrous quarterly report at the beginning of the month, Intel’s stock price has dropped by 34.6%; such dynamics clearly do not suit many investors, which is why the initiative group filed a lawsuit.