Intel shareholder suit accusing chipmaker of hiding foundry issues tossed

A federal judge in California threw out a lawsuit filed by a group of Intel (NASDAQ:INTC) shareholders who accused the company of hiding problems related to its foundry business that once revealed, led to a share price plunge.

The suit was initially filed in August 2024, shortly after the chipmaker released its Q2 results. The plaintiffs claim that on Aug. 1, Intel said that the foundry business was “floundering.” In an earnings release, Intel said it would engage in a $10B cost reduction plan, lay off more than 15% of its employees, and suspend its dividend later in 2024. On Aug. 2, Intel shares closed down 26%.

The foundry business had an operating loss of $7B in fiscal 2023.

Plaintiffs accused Intel of making misleading or false statements about how the company was doing from Jan. 25 through Aug. 1

However, U.S. District Judge Trina Thompson said that Intel was not liable for delaying the foundry results given that the company said they would be “obscured” and releasing preliminary, unaudited data could have exposed the company to risks, Reuters reported.