Intel Clears Shareholder Lawsuit Over $32 Billion Stock Drop

Intel has been cleared of a shareholder lawsuit alleging the company concealed problems in its foundry business, which led to a $32 billion stock price plunge. US District Judge Trina Thompson ruled that Intel did not wait too long to reveal a $7 billion operating loss in the business. The judge dismissed the lawsuit with prejudice, meaning the shareholders cannot sue again.

Intel has been cleared of a shareholder lawsuit alleging the company concealed problems in its foundry business, which led to a $32 billion stock price plunge. U.S. District Judge Trina Thompson ruled that Intel did not wait too long to reveal a $7 billion operating loss in the business. The judge dismissed the lawsuit with prejudice, meaning the shareholders cannot sue again [1].

The lawsuit accused Intel of defrauding shareholders by concealing issues in its foundry business, which manufactures chips for outside customers. The stock price of Intel sank 26% on August 2, 2024, following the announcement of over 15,000 layoffs and a suspension of its dividend to save $10 billion in 2025 [1].

Judge Thompson's decision was based on the fact that Intel made clear that foundry results would be "obscured" until 2024, meaning its earlier financial reporting was not false and misleading. She also cited an "overarching policy consideration" that Intel's public statements suggested a "trial-and-error" approach to the foundry business, which could have faced risks from reporting preliminary, unaudited data [1].

Intel has struggled to compete with rival chipmakers such as Nvidia, Advanced Micro Devices, Samsung Electronics, and Taiwan's TSMC, and benefit from growth in artificial intelligence. The company lost $18.8 billion in 2024, its first annual loss since 1986 [1].

The case is In re Intel Corp Securities Litigation, U.S. District Court, Northern District of California, No. 24-02683 [1].

References:
[1] https://www.reuters.com/sustainability/boards-policy-regulation/intel-beats-shareholder-lawsuit-over-32-billion-stock-plunge-2025-07-24/