News Intel slapped with class action lawsuit over foundry revenues — litigants allege securities fraud

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Alvar Miles Udell said:
Probably will end up like the AMD Bulldozer lawsuit where plantiffs end up with $25.
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USAFRet said:
Just like every other "class action" lawsuit.
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Not like every other, most of them never manage to get to court, this one also, if you read the article the last line says that they are still searching for someone that actually lost (enough) money to be the main plaintiff.
If nobody steps forward this will also just go away just like most other ones.
And since those that lose a lot of money are professionals that would mean that they would have to admit publicly that they screwed up and that would lose them a lot of business.
 
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TerryLaze said:
Not like every other, most of them never manage to get to court, this one also, if you read the article the last line says that they are still searching for someone that actually lost (enough) money to be the main plaintiff.
If nobody steps forward this will also just go away just like most other ones.
And since those that lose a lot of money are professionals that would mean that they would have to admit publicly that they screwed up and that would lose them a lot of business.
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I should have specified..."some other", instead of "every other".

Consider the price fixing for CD's, long ago.
Sony, et al were convicted of colluding to artificially raise the retail price of music CD's.

Given the artificial price raise, and how many CD's I had purchased....I was out $250+.
Eventually, I got a check for $3.50.
 
TerryLaze said:
Not like every other, most of them never manage to get to court, this one also, if you read the article the last line says that they are still searching for someone that actually lost (enough) money to be the main plaintiff.
If nobody steps forward this will also just go away just like most other ones.
And since those that lose a lot of money are professionals that would mean that they would have to admit publicly that they screwed up and that would lose them a lot of business.
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Which is true for some stocks, stocks which aren't held by institutions, but this is Intel. Being Intel, they have a large amount of shares held by institutions (I'll just quote the Yahoo Finance table for brevity). Since they are looking for shareholders who lost money during the period, not just shareholders who bought during the period, it makes them all fair game. Vanguard and Blackrock alone total well over half a billion shares, so even if the recovery to shareholders were to be 20% of lost value (about $2 a share as it dropped $10 a share during the class period), it's a significant amount of fee for the lawyers, so it won't be dropped, and the lead plaintiff will likely be a state or institution rather than one specific person.


Top Institutional Holders​

HolderSharesDate Reported% OutValue
Vanguard Group Inc389.1MMar 31, 20249.14%11,848,047,642
Blackrock Inc.343.93MMar 31, 20248.08%10,472,775,672
State Street Corporation190.4MMar 31, 20244.47%5,797,585,354
Capital International Investors112.09MMar 31, 20242.63%3,413,249,657
Geode Capital Management, LLC86.31MMar 31, 20242.03%2,628,104,822
Primecap Management Company76.13MMar 31, 20241.79%2,318,007,434
Morgan Stanley50.98MMar 31, 20241.20%1,552,402,426
Norges Bank Investment Management48.24MDec 31, 20231.13%1,468,993,936
Northern Trust Corporation42.73MMar 31, 20241.00%1,301,249,175
Barclays Plc40.99MMar 31, 20240.96%1,248,212,612
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What I don't get is how they figured they were cheated? I mean, 14nm was late to the party, but stuck around through 14+++++++++++ because 10nm was screwed from the get go. They lost foundry customers during all of this and wound up in a mess. Unless you count their renaming scheme 10=7, 7=5. and who knows what 20A actually is, their track record in chipmaking recently has been screwed for a long time, and as Pat said, it's going to take time to "fix", if it can be fixed.
 
steve15180 said:
What I don't get is how they figured they were cheated? I mean, 14nm was late to the party, but stuck around through 14+++++++++++ because 10nm was screwed from the get go. They lost foundry customers during all of this and wound up in a mess. Unless you count their renaming scheme 10=7, 7=5. and who knows what 20A actually is, their track record in chipmaking recently has been screwed for a long time, and as Pat said, it's going to take time to "fix", if it can be fixed.
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Alleged financial reporting deception that led investors to believe things weren't as bad as they were, which was revealed earlier this year when they reported their foundry earnings as a separate entity and crashed the stock price by over 25%.
 
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Alvar Miles Udell said:
Which is true for some stocks, stocks which aren't held by institutions, but this is Intel. Being Intel, they have a large amount of shares held by institutions (I'll just quote the Yahoo Finance table for brevity). Since they are looking for shareholders who lost money during the period, not just shareholders who bought during the period, it makes them all fair game. Vanguard and Blackrock alone total well over half a billion shares, so even if the recovery to shareholders were to be 20% of lost value (about $2 a share as it dropped $10 a share during the class period), it's a significant amount of fee for the lawyers, so it won't be dropped, and the lead plaintiff will likely be a state or institution rather than one specific person.
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Companies like Blackrock and Vanguard aren't actually invested with their own money though. They own those shares on behalf of investors who have purchased their ETFs. I don't know what implications that could have in terms of the legal standing of these money management firms for a case like this.
 
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Alvar Miles Udell said:
Alleged financial reporting deception that led investors to believe things weren't as bad as they were, which was revealed earlier this year when they reported their foundry earnings as a separate entity and crashed the stock price by over 25%.
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Was there anybody before that new reporting that thought that intel was making money with the foundry?! They had almost no customers at all, from day one they are building all of the FABs without having any customers for them and that was pretty clear from the beginning, I mean even in here that's what everybody keeps saying and we are the least informed about this stuff.
Anybody taking a claim on this class action would have to admit to not having any idea what they are doing.
 
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TerryLaze said:
Was there anybody before that new reporting that thought that intel was making money with the foundry?! They had almost no customers at all, from day one they are building all of the FABs without having any customers for them and that was pretty clear from the beginning, I mean even in here that's what everybody keeps saying and we are the least informed about this stuff.
Anybody taking a claim on this class action would have to admit to not having any idea what they are doing.
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No doubt it's a result of this:

https://www.marketwatch.com/story/i...reaking-out-foundry-business-results-7dbd9547

In April they released "restated results" of their foundry business for the last three years, after that date their stock has slid from about $44 to about $30.50. Clever lawyers use that, among other things, to wring out cash from them.
 
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TerryLaze said:
Was there anybody before that new reporting that thought that intel was making money with the foundry?! They had almost no customers at all, from day one they are building all of the FABs without having any customers for them and that was pretty clear from the beginning, I mean even in here that's what everybody keeps saying and we are the least informed about this stuff.
Anybody taking a claim on this class action would have to admit to not having any idea what they are doing.
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Stockholders bailed and helped tank the stock.

It's easily possible that someone who knew what they were doing assumed everyone else knew what they were doing and had accurately priced-in the expect losses on the foundry business. When this turned out not to be the case the stockholders (especially new purchasers) who knew what they were doing still conceivably lost money because of those who didn't and bailed.
 
While some of any payouts from a lawsuit could theoretically be clawbacks of executive compensation, it's more likely to come from Intel's cash. Which means it comes from Intel's other stockholders. If the payout is large, it may have an additional impact on Intel's share price.

Anyone looking to become the lead plaintiff will take this into account. I don't know how this calculation will go, but I'd expect that the larger investors would not be willing to become a plaintiff.
 
I wouldn't be surprised if it were an individual with a few shares (relatively speaking) ends up being the lead plaintiff, or someone who has a large short position looking to bring down the price even more, or someone with just a couple of shares wants their name attached so they can have fame for their social media page.

hotaru251 said:
not even. this only effects investors so a lot less people to split the pie with.
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With 4.23B outstanding shares, 30% of which aren't institutional, there's potentially hundreds of thousands of people involved, maybe more since there may be a decent number of people.

Though these things can take ages to remedy. I see a Google shareholder lawsuit from 2018 is just settling this year for $3 a share out of a $350M settlement, so Intel could drag this thing out until 2030
 
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They are suing because the Intel Foundry losses were greater than they were expecting?

Would like to see this case go forward so I can understand how this has any merit... Is this a winning strategy, sue a company when they don't perform and recoup your losses via lawsuit?

The foundry financials mess has many contributing factors : Delaying EUV, 10nm delays, weakening competitive position(underloading), all while ramping fab capacity and buildings to compete in the future. They are hugely unprofitable and don't expect to break even until 2027
and the company is driving for Intel Foundry to achieve break-even operating margins midway between now and the end of 2030


It was the right move for Intel to display the inefficiencies so they can address and clean them up, but that truth being revealed will also wake up many to some of the dire outlook Intel is in if it can't fix its manufacturing mess. People have been raising the alarm on Intel's viability and survival in this competitive landscape for the last 8 years.

You bet wrong, good luck on the lawsuit.
 
cyrusfox said:
They are suing because the Intel Foundry losses were greater than they were expecting?
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no they are suing becasue they feel Intel purposefully lied to investors in past & when it came out and casued stock to drop that potentially cost people $. (who would of sold prior to that or bought more when it happened as if reported back then it would of dropped in value meaning more profit if they bought then and sold later)


its not about losing more than expected its how they didn't disclose information to the investors as investors like to be kept in loop to maximize their own profits via buying, selling at high and lows.
 
This is nothing but a bad faith move by angry "investors" who aren't really investing but rather gambling and they lost. It also might be the investor groups who want Intel to spinoff the foundry services.

As has already been stated Intel's Foundry has never been a profit center for the company. Intensive capital investment for expansion of a business that didn't have any external customers is never going to be a money winner.
 
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hotaru251 said:
no they are suing becasue they feel Intel purposefully lied to investors in past & when it came out and casued stock to drop that potentially cost people $. (who would of sold prior to that or bought more when it happened as if reported back then it would of dropped in value meaning more profit if they bought then and sold later)


its not about losing more than expected its how they didn't disclose information to the investors as investors like to be kept in loop to maximize their own profits via buying, selling at high and lows.
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Intel of today is vastly more transparent (Disclosing all the information) than the perpetual 10nm delay Intel of old ("on track and expected to release...") check out this old document from a similar investment lawsuit which I think has vastly more merit than this one.
https://static.blbglaw.com/docs/BLBG-#1434499-v1-2021-01-15_Intel_Complaint_-_FINAL_(As_Filed).pdf
Intel handily beat that one. Once again, good luck investors in suing for profits.
https://dockets.justia.com/docket/circuit-courts/ca9/23-15695
news.bloomberglaw.com

Intel Defeats Investor Appeal Over Missed Moore’s Law Benchmark

A suit by Intel Corp. shareholders over statements about the company’s progress toward achieving a smaller microchip was properly dismissed, the Ninth Circuit affirmed Friday.
news.bloomberglaw.com news.bloomberglaw.com
 
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