News Intel 7nm Delay Fallout; Law Firm Launches Securities Fraud Investigation

[Admin]

The Hagens Berman law firm has launched an investigation into possible investor and securities fraud surrounding Intel's delayed 7nm process.

Intel 7nm Delay Fallout; Law Firm Launches Securities Fraud Investigation : Read more

 

[salgado18]

This is why I think companies shouldn't go public. Random people force you to make a profit, and sue you if you don't. You become accountable to an entire mass of people who don't help you do anything, don't bring anything to the company, but put a knife in your back and say "earn money or else".

I know we shouldn't criticize the system, but it is what it is.

 

[Makaveli]

This is why I think companies shouldn't go public. Random people force you to make a profit, and sue you if you don't. You become accountable to an entire mass of people who don't help you do anything, don't bring anything to the company, but put a knife in your back and say "earn money or else".

I know we shouldn't criticize the system, but it is what it is.

This is the reason I would never take a company public if I was ever in the position to make that choice.

As soon as you are down little your own investors are kicking you in the nuts for profits.

 

[ingtar33]

there are transparency requirements for public companies. The question at hand in this lawsuit is WHEN did Intel know 7nm was having issues. The reason this is pertinent is in the last Quarter report to their stock holders they REALLY pumped up how on track 7nm was, and expressed their confidence in getting to market soon with those parts. If they knew 7nm was in trouble at the time of that report they'll lose this lawsuit cleanly. There are a lot of things a public company can do about bad news. They can hide it to a certain extent without too many issues with securities violations. For example had intel not said anything specific about 7nm in their last report to their investors then this lawsuit wouldn't happen.

Furthermore this suit was clearly filed to DISCOVER when intel knew 7nm was in trouble. The people filing it don't know if they have a case yet, they're fishing for a case with discovery. Hence their calls for people inside intel to talk to them. They need proof intel knew 7nm was in trouble before they made their public statements to the contrary. I have a buddy who works at intel here in phoenix, and he said it was "rumored" that 7nm was running into a lot of the same issues intel has had with 10nm a while ago (6-8mo ago) which if true, then it's highly likely these lawyers have a case.

In fact intel made a lot of really confident public remarks about 7nm in the past 6mo, both to the gaming/tech press and their investors. If intel knew those was bs when they made those comments then this will go south on them fast.

 

[nofanneeded]

This is why I think companies shouldn't go public. Random people force you to make a profit, and sue you if you don't. You become accountable to an entire mass of people who don't help you do anything, don't bring anything to the company, but put a knife in your back and say "earn money or else".

I know we shouldn't criticize the system, but it is what it is.

lol , no one can "force" a Monopoly , and no one with a mind will buy shares from companies if they dont have transparency ...

and from my experience the Large companies are the backstabbers , not the "random" guy. you will be shocked from the huge amount of corruption that exists in every huge firm.

Do you really think that the 7nm delay is "normal" ?? no it is inside corruption.

 

[spongiemaster]

This is why I think companies shouldn't go public. Random people force you to make a profit, and sue you if you don't. You become accountable to an entire mass of people who don't help you do anything, don't bring anything to the company, but put a knife in your back and say "earn money or else".

I know we shouldn't criticize the system, but it is what it is.

Normally, I view these lawsuits as frivolous and ridiculous. However, this one I was expecting and looks like there is a legitimate complaint being filed. As I said in a different thread, the CEO can't say in January that everything is going great and they're looking to get back to a 2-2.5 year process cadence, and then 6 months later say they're 12 months behind on expected yields and delaying the next release at least 6 months. There is a clear disconnect there. You can't blatantly lie to investors about your progress on production. Intel isn't getting sued just because the stock price plummeted. They're getting sued because they lied to investors which artificially kept the stock price higher than it should have been had they been truthful all along. Then the out of no where delay announcement cratered the stock price.

 

[Math Geek]

i've never cared for claimed "loses" like this. the stock price has dipped but if you don't sell then you never actually realize the loss. people have proven they have a 30 millisecond memory and will forget this as quickly as the next season of survivor comes on. the price will come back up and the world will move on.

i'd rather see the SEC come down on them like a ton of bricks rather than some law firm pretend to care about people while claiming 90% of the settlement that will surely come. the investors will lose out for sure to the law firm that won't even flinch at taking the whole loot box and laughing as they walk away.

i hate what intel has done but it won't matter since they will sell as many of the next 3 cycles of 14nm++++++++++++++++++++ as they currently do no matter what they perform like. fanboys and the basic prebuilt pc buyers won't know nor care so long as they get to play solitaire for free.

 

[derekullo]

i've never cared for claimed "loses" like this. the stock price has dipped but if you don't sell then you never actually realize the loss. people have proven they have a 30 millisecond memory and will forget this as quickly as the next season of survivor comes on. the price will come back up and the world will move on.

i'd rather see the SEC come down on them like a ton of bricks rather than some law firm pretend to care about people while claiming 90% of the settlement that will surely come. the investors will lose out for sure to the law firm that won't even flinch at taking the whole loot box and laughing as they walk away.

i hate what intel has done but it won't matter since they will sell as many of the next 3 cycles of 14nm++++++++++++++++++++ as they currently do no matter what they perform like. fanboys and the basic prebuilt pc buyers won't know nor care so long as they get to play solitaire for free.

Wait solitaire is free!?!?!

The microsoft technician from New Delhi said I had to pay $10 a month to access solitaire.

 

[derekullo]

Maybe the lawyers should put away their law books and study up on CPU lithography.

More people helping Intel couldn't be a bad thing ... unless you are AMD.

 

[gg83]

Didn't Intel have another record profit? I bet investors have now idea what 7nm even refers to.

 

[DZIrl]

And what is going to happen?
C managers will get a bit less in bonuses, CEO might be fired but will get job in another company and several thousands workers will be laid off.
Of course, ones who were complaining and process will be either laid off or will continue not to be listened to.
There is a nice Linus talk about Intel. It was last week or so.

 

[Math Geek]

CEO might get fired but at least he won't have to suffer long due to a $50 mil golden parachute or whatever ridiculous amount he'll get for "leading" the company into this mess. (yes i know he came on late in the game but he still the one lying to the investors about it )

 

[drtweak]

That profit loss isn't a loss until they cash out.

Also I wonder how many of these people even know what a transistor is, what the 14/10/7 nm even means, or how hard it is to actually design one.

 

[Chung Leong]

My prediction is that the case will be settled for a hefty amount. It's a no-win situation for Intel management. Refuting the accusation of deceit means admitting to incompetence.

 

[Co BIY]

Hefty amount for the attorneys and little to nothing for the investors. Scam Lawsuit like almost all class actions which are designed to create big payouts for law firms and do nothing for the economy or other parties. I would like to see the fees reduced to average attorney per hour rates. Legal extortion.

The settlement will have no admission of guilt but some vague mutterings about future performance because there would have to some standard to even pretend to argue about next round.

The damages argument is convoluted. My client's theoretical "profit" loss is calculated from the artificial high created by the statements that are so misleading. My client(s) needed to lose money earlier (when the record profits were being booked) so they wouldn't imaginary lose money now. Also the company needs to pay my law firm a large check now from their reduced profits for the benefit of the shareholders, as a class of course.

 

[bit_user]

You become accountable to an entire mass of people who don't help you do anything, don't bring anything to the company,

They bought shares. Originally, shares were issued for the purpose of raising money to accelerate a company's growth.

Lately, companies seem to be leaning on numerous other finance streams, instead. So, the point of an IPO is now just to give its execs and VCs a payday.

A big benefit to customers, workers, the economy, and society is that publicly-traded companies are required to provide a substantial degree of transparency. It's also significant that shareholders get to vote on major decisions. In the case of a private company, there's none of that. It's basically just a black box.

As for the downsides of being a public company, I think Qualcomm stands as a good example. Activist investors forced them to kill off numerous internal profits and force the company to prioritize short-term profitability. They can also push for (more) dividends, which deprives companies of capital they could otherwise invest in future growth.

Though I'm pretty negative on dividends, from a company's perspective, I suppose they do serve a function in supporting wealth redistribution. Otherwise, I guess you'd just have all of the profits going a tiny class of billionare owners.

I know we shouldn't criticize the system, but it is what it is.

Huh? Why shouldn't we criticize?

Everyone knows it's not perfect, and more discussion of its positives and negatives can (theoreticaly) lead to fixes and improvements.

The US economic system wasn't created by divine hands, and it ultimately exists to serve pragmatic ends. We shouldn't forget that, and shouldn't lose sight of where it's doing well and poorly.

 

[bit_user]

i've never cared for claimed "loses" like this. the stock price has dipped but if you don't sell then you never actually realize the loss. people have proven they have a 30 millisecond memory and will forget this as quickly as the next season of survivor comes on. the price will come back up and the world will move on.

You're making a lot assumptions about who is buying the stock, how long they planned to hold it, and what Intel's longer-term outlook is.

The impending loss of the Chinese market will weigh heavily on Intel. Then, competition from x86 (Zhaoxin) and non-x86 Chinese competitors will deprive much of their sales in developing countries, leaving them with just North America and Europe.

They also face headwinds from ARM in both the laptop market (Qualcomm 8cx) and the cloud (Amazon Graviton 2).

They're making a big bet on AI, but it's still unclear if they can unseat Nvidia or other maturing competitors.

The point is that you just can't be certain Intel will surpass this price, or have any confidence in how long that will take.

 

[TerryLaze]

My prediction is that the case will be settled for a hefty amount. It's a no-win situation for Intel management. Refuting the accusation of deceit means admitting to incompetence.

First these ambulance chasers need to find enough evidence to even get as far as being able to start a case,if you read the article they are still searching for anybody with any info.

Hefty amount for the attorneys and little to nothing for the investors. Scam Lawsuit like almost all class actions which are designed to create big payouts for law firms and do nothing for the economy or other parties. I would like to see the fees reduced to average attorney per hour rates. Legal extortion.

Yeah if everybody in that class action put together and paid the per hour rate during all of the time it takes to get to court then this would be possible.
keep in mind that the law firm is getting nothing for maybe years and if the opposing side doesn't settle and/or if they lose they get nothing period.

 

[hoba_rce]

That is what happens when you put people in charge not because they are good but because they have the right color or sexual preferrence.

The former CEO Krzanich was all about diversity, equality and all the BS. Wanna be a section chief and the only qualification is being homo? Why not.

Now they lack behind the competition at least 3 years in development. AMD has 7nm for over a year now and slowly moving to 5nm. Intel is stuck at 14nm for 6 years now. 10nm is out of sight and 7nm is sci-fi for them. The only thing they did is to fire that moron and hire someone who will put things back to schedule.

I work for a worldwide corporation myself and we are starting to go the same way. Our CEO is all about workplace diversity and we were recommended to put our gay colleague in charge. Not because he is good and he earned that promotion but because he is gay. 😀

 

[Chung Leong]

Hefty amount for the attorneys and little to nothing for the investors. Scam Lawsuit like almost all class actions which are designed to create big payouts for law firms and do nothing for the economy or other parties. I would like to see the fees reduced to average attorney per hour rates. Legal extortion.

Someone has to stand up for the little guy. That they're handsomely rewarded for doing so is hardly unfair.

What we have here in reality is a case of new Intel investors seeking damage from existing Intel investors. It was the latter's responsibility to ensure that management at the company are honest and competent. One way or another, they failed. For that they should pay.

 

[salgado18]

Though I'm pretty negative on dividends, from a company's perspective, I suppose they do serve a function in supporting wealth redistribution. Otherwise, I guess you'd just have all of the profits going a tiny class of billionare owners.

I think that's the only upside.

This kind of transparency is not that important, because it focuses on administrative and financial data, which is only important to the company itself. It's just a health monitor for the company. The really bad practices, like slave labour, environmental damage and corruption will keep being hidden from the public.

I mean, does it really make a difference, other than to discuss in tech forums, who designed what chip?

But that's not really the point, the point is: is it right for outside stock holders to have a say on the designer of a chip, if they know nothing of tech? That didn't stopped Bulldozer, for example.

From a company perspective, it only needs the investment money. From a customer perspective, it only needs the product. From a society perspective, it needs to abide by the law. The stock market doesn't offer any of that, and still makes the company hostage to the financial market.

Huh? Why shouldn't we criticize?

People don't like those who criticize the system. Go anywhere and say "the stock market is deeply flawed, and shouldn't exist as it is" to see how many friends you lose. 😛

 

[Chung Leong]

First these ambulance chasers need to find enough evidence to even get as far as being able to start a case,if you read the article they are still searching for anybody with any info.

You don't need evidence to sue someone. Your claim just needs to have an arguable basis. To get a case thrown out, a defendant must persuade the court that the plaintiff has no chance of winning. Intel will try that no doubt and it'll certainly fail. At this point it will settle because it doesn't want outside lawyers going through internal e-mails during discovery.

 

[TerryLaze]

You don't need evidence to sue someone. Your claim just needs to have an arguable basis.

You need at least as much proof to convince the court that there might be something there,it's called burden of proof.
If you could just sue anybody without any effort on your side it would be complete chaos in the world.
Also everything is arguable,this word just means that you can argue about something and you can argue about everything.
https://en.wikipedia.org/wiki/Burden_of_proof_(law)

 

[Chung Leong]

If you could just sue anybody without any effort on your side it would be complete chaos in the world.
Also everything is arguable,this word just means that you can argue about something and you can argue about everything.

If the case goes to trial and you show up with nothing, the court could force you to pay the other guy's legal fees. He could also counter-sue you for defamation.

 

[bit_user]

This kind of transparency is not that important, because it focuses on administrative and financial data, which is only important to the company itself. It's just a health monitor for the company. The really bad practices, like slave labour, environmental damage and corruption will keep being hidden from the public.

Finances are the company's lifeblood, and tie together all of its activities. While I grant you that it's not nearly enough visibility to prevent much corporate malfeasance, it does include things like pending litigation, since those represent financial liabilities. So, I ask you this: just because it's not all of the visibility you might like, is that a reason to get rid of it?

I mean, does it really make a difference, other than to discuss in tech forums, who designed what chip?

But that's not really the point, the point is: is it right for outside stock holders to have a say on the designer of a chip, if they know nothing of tech? That didn't stopped Bulldozer, for example.

That's not the kind of thing that shareholders vote on. They vote on board members, mergers, and major financial decisions like issuing more shares.

I believe they can motion to vote on other things, but I think that rarely goes anywhere.

From a company perspective, it only needs the investment money. From a customer perspective, it only needs the product. From a society perspective, it needs to abide by the law. The stock market doesn't offer any of that, and still makes the company hostage to the financial market.

For all its problems, like the obsessive focus on quarterly results, I do think there's a benefit for society by allowing public ownership of corporations. And having shareholders to which the company has a fiduciary responsibility does keep the company focused on financial performance, which probably minimizes the degree that corporate wealth & power is abused for other purposes.

I think a lot of the downsides of the stock market can be addressed through fine-tuning laws and SEC regulations. Am I optimistic this will happen? Of course not. But I don't think it's really such a bad thing as is, and this conversation has helped me see that.

People don't like those who criticize the system. Go anywhere and say "the stock market is deeply flawed, and shouldn't exist as it is" to see how many friends you lose. 😛

I haven't seen anyone criticize you, here. Thanks for sharing your thoughts and perspectives.