Shareholders sue Intel over concealing issues that sank shares

STORY: Intel shareholders sued the company on Wednesday (August 7).

They said the Silicon Valley chipmaker fraudulently concealed problems that led it to post weak results, cut jobs and suspend its dividend.

And caused its market value to sink over $32 billion in one day.

Intel has struggled to fend off competition from rival chipmakers and benefit from the booming AI market.

The lawsuit was filed in San Francisco federal court against Intel, its CEO Patrick Gelsinger, and his chief financial officer.

Shareholders said they were blindsided when Intel revealed a week ago that its business of making chips for clients was, in their words, “floundering”.

And that it was costing billions of dollars in extra investment - even as revenue declined.

Shareholders added that the company’s materially false or misleading statements on the business and its manufacturing capabilities inflated its stock price this year.

There was no immediate comment from the firm.

The lawsuit came after an announcement last week that Intel would suspend its dividend and lay off over 15% of its workforce - more than 15,000 jobs.

That's all part of a restructuring meant to save $10 billion in 2025.

Shares in the firm have fallen over 34% since the announcement.