- Intel (INTC) secured a dismissal of a shareholder lawsuit on Tuesday, March 04, 2025, as Judge Trina Thompson ruled the company didn’t mislead investors about a $7 billion foundry loss, despite a $32 billion market value drop after a $1.61 billion quarterly loss and 15,000 job cuts.
- The Reuters-reported decision found former CEO Patrick Gelsinger’s claims of “significant traction” weren’t fraudulent, and the $7 billion loss wasn’t solely tied to Intel Foundry Services, allowing Intel to avoid liability for now, though shareholders can amend their complaint.
Intel (INTC) notched a legal win as U.S. District Judge Trina Thompson in San Francisco dismissed a shareholder lawsuit on Tuesday, March 04, 2025, ruling that the chipmaker didn’t fraudulently hide a $7 billion operating loss in its foundry business, according to a Reuters report. The plaintiffs claimed Intel’s delay in revealing the loss – only disclosed last April when it revamped its financial reporting – misled investors, contributing to a stock price inflation from January 25 to August 1, 2024. That bubble burst when Intel reported a $1.61 billion quarterly loss, announced plans to cut more than 15,000 jobs, and suspended its dividend to save $10 billion in 2025, triggering a 26% share price drop the next day and erasing over $32 billion in market value. Judge Thompson, however, found the shareholders’ case shaky, noting they wrongly pinned the $7 billion loss solely on the Intel Foundry Services unit rather than the broader Internal Foundry Model.
Reuters highlighted how this ruling shields Intel from claims it deceived investors about its foundry struggles, a segment meant to make chips for external clients. The judge also backed former CEO Patrick Gelsinger’s March statements about “significant traction” and “growing demand,” deeming them specific to certain customers—not a rosy spin on overall revenue, which was actually declining. Intel’s been wrestling with fierce competition and missing out on the AI boom that’s lifted rivals, making its foundry pivot a critical but rocky bet. Thompson clarified that Intel’s reporting shift last April didn’t signal deceit, and while the $7 billion loss was real, it wasn’t the smoking gun shareholders alleged. Intel declined to comment, per Reuters, while the plaintiffs’ lawyers didn’t respond by Wednesday—though they’ve got a shot to amend their complaint.
The $32 billion market value wipeout after that $1.61 billion loss announcement underscores Intel’s precarious spot, but this dismissal offers some breathing room. The company’s Santa Clara base hasn’t been a fortress against rivals lately, and that 26% stock plunge reflects investor jitters over its $10 billion cost-cutting plan, including those 15,000 layoffs. Still, Judge Thompson’s take suggests Intel’s woes – while steep – don’t equate to fraud, at least not on the $7 billion foundry loss front. Reuters notes this saga’s part of Intel’s broader fight to regain footing in a chip market increasingly dominated by AI-driven players, where its foundry ambitions haven’t yet delivered the turnaround hoped for. For now, the court’s given Intel a pass, but the door’s open for shareholders to refine their case.
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