Intel Corporation Class Action Lawsuit Deadline Announced by GPM
Glancy Prongay & Murray LLP (GPM) has highlighted a critical deadline for investors of Intel Corporation (NASDAQ: INTC) to file a lead plaintiff motion in a class action lawsuit, focusing on the period between January 25, 2024, and April 25, 2024. This lawsuit centers on allegations against Intel for providing materially false and/or misleading statements and not disclosing adverse facts about its business operations and prospects, especially regarding its Foundry segment. The legal action is a response to Intel’s significant operational and financial downturns, as evidenced by the substantial losses reported in its Foundry segment and the subsequent negative impact on its stock price.
Intel disclosed a staggering operating loss of $7 billion in its Foundry segment for the year 2023, on sales of $18.9 billion. This marked a significant decline from the previous year, with Foundry revenue down $8.6 billion from 2022. The operating loss was partly due to a $2.1 million decrease in product profit, attributed to lower internal revenue. This disclosure led to a sharp $3.61 drop in Intel’s stock price, or 8.2%, closing at $40.33 per share on April 3, 2024, amid unusually heavy trading. The situation worsened when Intel announced its first-quarter financial results for 2024, revealing a 10% decline in Foundry segment revenue compared to the same quarter the previous year, resulting in another significant drop in Intel’s stock price by $3.23, or 9.2%, closing at $31.88 per share on April 26, 2024.
The lawsuit’s allegations against Intel include the failure to disclose that the growth of Intel Foundry Services was not indicative of revenue growth reportable under the Internal Foundry segment and that the Foundry experienced significant operating losses in 2023. It also claims that Intel’s positive statements about its business, operations, and prospects were materially misleading and/or lacked a reasonable basis. These allegations are supported by Intel’s reported financial performance, which saw a decline in quarterly financial performance, with revenue growth declining by approximately 17.41%, and a significant drop in gross profit growth by around 25.97%. Moreover, net income growth plummeted by an alarming 114.28%, with operating income growth also experiencing a steep decline of approximately 149.97%.
Despite these challenges, Intel saw a slight increase in asset growth by about 0.61%. However, the company faced a drastic reduction in free cash flow growth, which decreased by about 247.15%, and operating cash flow growth fell by approximately 126.45%. Additionally, there was a marginal decrease in book value per share growth by roughly 0.11%, while debt growth saw an increase of about 6.44%. These financial metrics underscore the substantial operational and financial challenges Intel has faced, contributing to the allegations made in the lawsuit.
Investors who suffered a loss on their Intel investments during the specified class period may seek to recover their losses under federal securities laws. They have until July 2, 2024, to request appointment as lead plaintiff in the class action lawsuit. Interested parties can contact Charles H. Linehan of GPM for more information on their rights and potential claims. This lawsuit and the financial data surrounding Intel’s performance paint a picture of a company struggling with its Foundry segment, leading to significant financial downturns and impacting investor confidence.
