Judge Sides with Intel! Shareholder Lawsuit Dismissed in Shock Ruling
Intel just dodged a major legal bullet. A judge has officially dismissed a shareholder lawsuit that accused the tech giant of misleading investors about its struggling foundry business. The case revolved around a massive 26% drop in Intel’s stock, wiping out $32 billion in market value in just one day. But the court ruled that investors simply didn’t have enough evidence to back their claims.
The Lawsuit: What Investors Were Claiming
The lawsuit, led by the Construction Laborers Pension Trust of Greater St. Louis, argued that Intel’s leadership misrepresented the health of its foundry business, which manufactures chips for other companies. They claimed that when the truth finally came out, investors suffered huge losses.
Their main argument? That Intel had hidden major financial problems, including a $7 billion loss in 2023, and that former CEO Patrick Gelsinger’s optimistic statements misled shareholders. But U.S. District Judge Trina Thompson disagreed, saying the investors couldn’t directly link Intel’s statements to the stock’s dramatic plunge.
Why the Judge Dismissed the Case
Judge Thompson ruled that the $7 billion operating loss wasn’t necessarily tied to the foundry business and that Gelsinger’s statements weren’t misleading. He had spoken positively about specific customers, not the company’s overall revenue, which was struggling at the time.
In short: There wasn’t enough proof that Intel executives knowingly misled investors. Because of this, the lawsuit was dismissed—but the shareholders do have the chance to refile their complaint if they can come up with stronger evidence.
What This Means for Intel
For Intel, which has been dealing with serious difficulties, this court victory is a welcome change. In the face of tech giants like Nvidia, AMD, Samsung, and TSMC, the firm is struggling to remain competitive.
Intel has halted its dividend in order to save $10 billion by 2025 and announced huge layoffs, with 15,000 jobs on the line. The business still has a long way to go in restoring investor trust, even winning this litigation.
What’s Next?
For now, Intel can breathe a little easier knowing that this lawsuit is off its back. But if investors decide to take another shot in court, this legal battle could come back to haunt them. And beyond the courtroom, Intel still has to prove it can bounce back in the fiercely competitive semiconductor industry.
