Intel defeats shareholder lawsuit over foundry losses, $32 billion plunge
By Jonathan Stempel
(Reuters) - Intel won the dismissal of a shareholder lawsuit accusing the chipmaker of fraudulently concealing problems in its foundry business, leading to job cuts and a dividend suspension that wiped out more than $32 billion of market value in one day.
In a decision made public on Tuesday, U.S. District Judge Trina Thompson in San Francisco rejected claims that Intel took too long to reveal a $7 billion fiscal 2023 operating loss linked to its business of making chips for outside customers.
Intel did not disclose the loss until last April, when it made changes to how it reported financial results.
But the judge said shareholders incorrectly attributed the $7 billion loss to the Intel Foundry Services business unit, and were not misled into believing the unit's reported results "included results for the entire Internal Foundry Model."
Thompson also said statements last March by former Chief Executive Patrick Gelsinger that Intel was enjoying "significant traction" and "growing demand for our foundry offering" were not misleading because they concerned specific customers rather than overall revenue, which was falling.
Lawyers for the shareholders did not immediately respond on Wednesday to a request for comment. Intel declined to comment. Thompson said the plaintiffs may file an amended complaint.
The lawsuit accused Intel of inflating its stock price from January 25 to August 1, 2024, when Intel posted a $1.61 billion quarterly loss and said it would lay off more than 15,000 people and suspend its dividend to help save $10 billion in 2025.
Intel's share price fell 26% the next day, resulting in the $32 billion loss of market value.
The Santa Clara, California-based company has struggled to fend off competition from rival chipmakers and benefit from growth in artificial intelligence.
Its rivals include Nvidia, Advanced Micro Devices, Samsung Electronics and Taiwan's TSMC. Intel ousted Gelsinger in December.
The case is In re Intel Corp Securities Litigation, U.S. District Court, Northern District of California, No. 24-02683.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
32 minutes ago
- Yahoo
US Court extends pause in Nippon Steel case, seeks updates by June 20
WASHINGTON (Reuters) -A U.S. Appeals court on Friday extended a pause in litigation between Nippon Steel and the Trump administration and gave the parties until next Friday to provide updates related to the case over the Japanese steelmaker's $14.9 billion bid for U.S. Steel. Nippon Steel and U.S. Steel have been putting the finishing touches on an agreement with the Trump administration to assuage national security concerns posed by the tie-up, announced in December 2023 and blocked by former President Joe Biden. That agreement would allow the transaction to move forward. In the filing, the D.C. Circuit said the litigation would be paused until further order of the court. The panel judges -- Patricia Millett, Cornelia Pillard and J. Michelle Childs -- also directed the two sides to provide the court with an update by June 20 about any future legal proceedings in the case. Such a filing could ask the court to continue to keep the case on pause, or ask the judges to set a new schedule.
Yahoo
32 minutes ago
- Yahoo
Amazon, Temu and other e-commerce sides hawk "No Kings" merch
"No Kings" merchandise is cropping up for sale on Amazon, Temu and other online retailers ahead of the planned nationwide protests against the Trump administration scheduled for Saturday. Hundreds of t-shirts, hats, signs and posters are for sale across the internet alluding to the demonstrations. On China-based a seller shipping goods from a U.S.-based warehouse offers a t-shirt reading "No Kings in America" and featuring the statue of liberty and American flag for $5.20. On Amazon, a search for No Kings yielded 1,000 results. Much of the merchandise available on the e-commerce giant's site is printed on demand, meaning not in stock. Sellers print t-shirts or make the goods as soon as they are ordered to avoid sitting on unwanted inventory. A wide variety of posters and yard signs are also available for sale on Esty's website. Walmart, which has distanced itself from an ad promoting No Kings day that was funded by Walmart heiress Christy Walton, offers a more limited amount of merchandise related to the events on its website. It's common for sellers to quickly mock up merchandise tied to current events. For example, retailers were quick to start selling apparel featuring images of President Trump with a bloodied ear after he was shot at a rally last year in an assassination attempt. The No Kings protests are scheduled to coincide with a military parade in Washington, D.C., to celebrate the army's 250th anniversary. "In America, we don't do kings," the No Kings website reads. "They've defied our courts, deported Americans, disappeared people off the streets, attacked our civil rights, and slashed our services. The corruption has gone too. far. [cq] No thrones. No crowns. No kings." Video shows Air India plane crashing in Ahmedabad Air India plane crashes shortly after takeoff, carrying more than 240 people Israel ready to launch operation into Iran, U.S. officials say
Yahoo
39 minutes ago
- Yahoo
Oil Market Long Numb to War Risk Confronts Weekend of Worry
(Bloomberg) -- The past two years of escalating tensions in the Middle East have taught oil traders to be sanguine about the risk of disruption to oil supplies. Shuttered NY College Has Alumni Fighting Over Its Future Trump's Military Parade Has Washington Bracing for Tanks and Weaponry NYC Renters Brace for Price Hikes After Broker-Fee Ban Do World's Fairs Still Matter? As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space The barrage of headlines has revived memories of the political upheavals and prices spikes of the 1970s — and yet even when oil prices have jumped, it inevitably proved short-lived. As Iran and Israel traded volleys of missiles in April last year and again in October, Middle Eastern oil continued to flow to the global market unaffected. Now, the latest assault by Israel is putting oil traders' nonchalance to the test. There's been no impact on supplies so far, but the strikes have shaken a market that for most of this year has been overshadowed by worries about a looming surplus driving down prices, with OPEC+ quickly unwinding production cuts and output rising elsewhere from Brazil to Guyana, while President Donald Trump's trade war threatens demand. Even if many believe that the oil market may ultimately escape unscathed, the widespread uncertainty over how strongly Iran will respond, whether Israel will launch further attacks, and how the US will react is forcing traders to price in a huge range of possible outcomes. With hours left until the end of the trading week, few were brave enough to risk going into the weekend short. Brent futures spiked as much as 13% early on Friday and settled 7% higher at about $74 a barrel. 'When there's a war on you're not going to be short anything over the weekend,' said Andreas Laskaratos, chief executive officer of energy trading house AB Commodities. 'Although the fundamentals haven't changed you can't trade against the headlines over the weekend.' Traders and analysts began to game out scenarios for possible escalation or de-escalation almost as soon as the first Israeli missiles hit Iran in the early hours of Friday morning. Laskaratos says his Europe-based traders were at their desks by about 4:30 or 5:00 a.m. Read Bloomberg's live blog on the latest from the Middle East Analysts at Goldman Sachs Group Inc. raised their oil price forecasts for the coming months $2-$3 a barrel, but laid out possible scenarios ranging from a surge in prices above $100 a barrel in the worst-case scenario, to a drop below $50 next year in their most bearish scenario. 'The potential of further escalation in the Middle East implies that the short-term risks to our price forecast are now skewed to the upside,' the analysts including Daan Struyven wrote. Still, they maintained their call for prices to drop below $60 by the fourth quarter of this year. A surge of trading in out-of-the money call options showed that many were seeking to hedge against the possibility of a price spike. Among the most traded options were call options that would pay out if prices rise above $85 a barrel by Jun. 25; a measure of the price of WTI call options relative to the price of put options surged to the highest since March 2022, when the market was rocked by Russia's full-scale invasion of Ukraine. The most worrying possibility for the oil market is a disruption of shipping through the Strait of Hormuz, through which about one-fifth of global oil supply flows. Most analysts reckon that's unlikely. 'It is our understanding that it would be extremely difficult for Iran to close the strait for an extended period given the presence of the US Fifth Fleet in Bahrain,' said Helima Croft, head of global commodity strategy at RBC Capital Markets LLC, and a former CIA analyst. Still, even if small, any increase in the chance of disruption is enough to drive prices. 'The possibility that the Strait of Hormuz closes is such a huge binary event, it makes forecasting balances challenging,' consultancy FGE NexantECA wrote in a report. 'Most market participants we have spoken to are not expecting the Strait of Hormuz to be closed; the consequences are just too great.' Other possible scenarios worrying oil traders include the possibility of strikes on Iran's oil infrastructure – though Israel has so far avoided that – or the potential for sanctions against Iran to be ramped up if Tehran responds to the strikes by accelerating its nuclear program. For now at least, most traders are viewing current events through the lens of recent history. 'For the past decade, events like this have been sell-the-rip situations. They didn't escalate. Fears were worse than what actually happened,' Dan Pickering, chief investment officer at Pickering Energy Partners LP, an energy-focused investment bank in Houston, wrote on X. The strikes may even turn out to be bearish. Trump on Friday called on Iran to make a deal or face 'even more brutal' attacks. If Tehran were to heed his advice, a nuclear deal would likely involve a relaxation of sanctions, potentially lifting Iran's exports. FGE NexantECA said that market participants were 'looking at the recent price action and starting to consider the events as a 'sell' opportunity.' 'However, they acknowledge that taking a short position right now is hard given the risk/expectation of further escalation in tensions in the weeks ahead.' Even if there is a disruption, OPEC+ members Saudi Arabia and the United Arab Emirates have significant spare capacity that could be brought on to potentially help cool prices. 'It would take a lot of courage for someone to go against it but that said we can't see this rally being sustained in the long term,' said Laskaratos of AB Commodities. 'We don't believe the fundamentals have changed on supply and demand as things stand.' --With assistance from Anthony Di Paola, Nayla Razzouk, Salma El Wardany, Hayley Warren and Demetrios Pogkas. American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
