Robbins LLP is Investigating the Allegations that Intel Corporation (INTC) Misrepresented its Business Prospects
Robbins LLP informs investors that a shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Intel Corporation (NASDAQ: INTC) securities between January 25, 2024 and April 25, 2024. Intel designs, develops, manufactures, markets, and sells computing and related products and services worldwide. The Company’s product portfolio is comprised of central processing units (CPUs), chipsets, processors, graphics processing units (GPUs), and other semiconductor products.
The Allegations
According to the complaint, on October 11, 2022, CEO Pat Gelsinger announced the Company would shift to an “internal foundry model” (the “Internal Foundry” or “Foundry” model). Under the Internal Foundry model, Intel would recognize revenues generated from both external foundry customers and Intel Products, as well as technology development and product manufacturing costs historically allocated to Intel Products. The Company emphasized the cost saving and margin improving benefits the Internal Foundry model would provide and the tailwind it would bring to IFS.
The complaint further alleges that on April 2, 2024, Intel issued a press release that disclosed a retrospective revision of the Company’s financial results under the new Foundry model reporting structure, revealing that the Foundry segment experienced an operating loss of $7 billion on sales of $18.9 billion in 2023, that Foundry revenue in 2023 was $18.9 billion down $8.6 billion from 2022, that that the segment’s operating loss included a $2.1 million in lower product profit driven by lower internal revenue. On this news, Intel’s stock price fell $3.61, or 8.2%, to close at $40.33 per share on April 3, 2024.
On April 25, 2024, after the markets closed, Intel released its first quarter 2024 financial results, the first quarter reporting the Company’s results under the Foundry model; the results revealed the Company’s Foundry segment declined 10% compared to the same quarter last year, to a revenue of $4.4 billion. On this news, Intel’s stock price fell $3.23, or 9.2%, to close at $31.88 per share on April 26, 2024.
Plaintiff contends that during the class period, defendants failed to disclose to investors: (1) the growth of Intel Foundry Services (“IFS”) was not indicative of revenue growth reportable under the Internal Foundry segment; (2) the Foundry experienced significant operating losses in 2023; (3) that the Foundry experienced a decline in product profit driven by lower internal revenue; and (4) as a result the Foundry model would not be a strong tailwind to the Company’s IFS strategy.
What Now: You may be eligible to participate in the class action against Intel Corporation. Shareholders who want to serve as lead plaintiff for the class must file their motions with the court by July 2, 2024. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.