Intel Escapes Shareholder Lawsuit Over $32 Billion Selloff

Intel defeated a shareholder lawsuit which accused the company of concealing problems in its chip foundry operations that allegedly resulted in a $32 billion market value decline. A federal judge in San Francisco dismissed the case with prejudice because Intel provided enough disclosure about financial risks and delays affecting its outsourcing-focused foundry segment.

The lawsuit emerged after Intel stock value plummeted 26% in August when the company disclosed a $7 billion foundry unit loss and cut its dividend and eliminated 15,000 jobs. The plaintiffs maintained that Intel deliberately concealed negative information to prevent immediate market reaction.

Judge Trina Thompson supported Intel by pointing out that the company had provided public warnings about unpredictable results and unclear reporting until at least 2024. The judge observed that Intel used a "trial-and-error" communication method and early disclosure of preliminary figures would have introduced additional risks.

Intel introduced its foundry business in 2021 to produce chips for Amazon and Qualcomm while maintaining its internal manufacturing operations. The court decision brought an end to the legal dispute which protects Intel from additional shareholder lawsuits stemming from the stock market decline.