Intel Defeats Shareholder Lawsuit over Foundry Losses, $32 Billion Plunge
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. The lawsuit claimed Intel took too long to reveal a $7 billion fiscal 2023 operating loss linked to its business of making chips for outside customers. However, the judge rejected claims that Intel misled shareholders by attributing the loss to a specific business unit rather than overall results.
- This decision may signal that investors are increasingly skeptical of CEO succession plans and executive departures, particularly when they occur amidst significant financial challenges.
- What implications might this outcome have on regulatory scrutiny of tech companies' capital allocation decisions in response to market volatility?