Intel shareholders sue chipmaker after job, dividend cuts cause stock plunge
The Hindu
Intel shareholders have sued the company after their weak earnings post which they plan to fire 15% of the workforce, for misleading them about the company.
Intel was sued on Wednesday by shareholders who said the Silicon Valley chipmaker 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 $32 billion in a single day.
The proposed class action against Intel, Chief Executive Patrick Gelsinger and Chief Financial Officer David Zinsner was filed in San Francisco federal court.
Shareholders said they were blindsided when Intel revealed on Aug. 1 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 Jan. 25 to Aug. 1.
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Intel had no immediate comment.
The lawsuit came after Intel said last Thursday it would lay off more than 15% of its workforce, or more than 15,000 jobs, and suspend its dividend starting in the fourth quarter as part of a restructuring meant to save $10 billion in 2025.
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