Intel Corporation (NASDAQ: INTC) is under the legal spotlight as Robbins LLP initiates a class action lawsuit against the tech giant for allegedly concealing crucial financial information from investors.
The lawsuit, filed on behalf of shareholders who purchased or acquired Intel securities between January 25, 2024, and April 25, 2024, centers on Intel’s transition to an “internal foundry model.” This model, introduced by CEO Pat Gelsinger on October 11, 2022, promised cost savings and margin improvements by integrating revenues from external foundry customers with Intel Products.
However, investors were left in the dark about significant setbacks. On April 2, 2024, Intel revealed retrospective revisions to its financial results under the new Foundry model, disclosing a staggering $7 billion operating loss for the Foundry segment in 2023 and a decline in revenue compared to the previous year.
The fallout was immediate. Intel’s stock price plunged by 8.2% on April 3, 2024, following the disclosure. Subsequently, Intel’s first-quarter financial results under the Foundry model, released on April 25, 2024, showed a 10% revenue decline in the Foundry segment compared to the same quarter the previous year, leading to another significant drop in the company’s stock price.
The plaintiff alleges that Intel’s management failed to disclose critical information during the class period, including significant operating losses incurred by the Foundry segment in 2023 and the subsequent decline in product profit driven by lower internal revenue.
This legal action underscores heightened scrutiny over Intel’s financial disclosures and business projections. Investors are advised to monitor developments closely as the class action lawsuit progresses.
