$Intel (INTC.US)$ The company faced a collective shareholder lawsuit on Wednesday, accusing it of using fraudulent means to conceal issues leading to weak performance, layoffs, and suspension of dividends, resulting in the company's market cap evaporating more than $32 billion within one day of the latest financial report being released.
It is reported that the accused parties in this class action lawsuit are Intel, Intel's CEO Patrick Gelsinger, and CFO David Zinsner.
The shareholders who filed the collective lawsuit stated that they were caught off guard when Intel disclosed on August 1 that its wafer fabrication business was 'struggling', and that while its revenue had declined, its additional costs amounted to billions of dollars. The shareholders claimed that Intel's material false or misleading statements regarding its business and manufacturing capabilities during the period from January 25 to August 1 artificially inflated the company's stock price.
Intel has not commented on the matter.
According to the financial report released by Intel last week, the company's second-quarter revenue declined by 1% year-on-year to $12.83 billion, with a net loss of $1.61 billion, far below market expectations. Faced with huge losses, Intel announced a layoff of 15,000 people and the suspension of dividends starting from the fourth quarter of this year, which is the first time the company has stopped dividends in 32 years. In addition, the company announced that its total capital expenditures for 2024 will be reduced by 20% to $25-27 billion, and further reduced to $20-23 billion in 2025.
It is worth noting that Intel's performance guidance is even more disappointing. The company expects third-quarter revenue to be $12.5-13.5 billion, significantly lower than the market's expected $14.37 billion, and the gross margin is expected to be 34.5%, also significantly lower than the market's expected 44.1%.
After announcing the financial report, Intel's stock price plummeted by 26% on August 2. The stock price fell by 3.6% to $18.99 on Wednesday. Since Intel released its second-quarter financial report, its stock price has fallen by a cumulative 34.6%.
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