Intel shareholders sue chipmaker after job, dividend cuts cause stock plunge
New throughout, adds Intel comment, accusations in lawsuit, financial details and plans, case citation, byline
By Jonathan Stempel
Aug 7 (Reuters) -IntelINTC.O was sued on Wednesday byshareholders who said the Silicon Valley chipmaker fraudulentlyconcealed problems that led it to post weak results, slash jobs and suspend its dividend, and caused its market value to sink more than $32 billion in a single day.
The proposed class action against Intel, Chief Executive Patrick Gelsinger and Chief Financial Officer David Zinsner was filed in San Francisco federal court.
Shareholders said they were blindsided when Intel revealed on Aug. 1 that its so-called foundry business for making chips on contract for outsiders was in their words "floundering," costing billions of dollars extra even as revenue declined.
They said the Santa Clara, California-based company's materially false or misleading statements regarding the business and its manufacturing capabilities inflated its stock price from Jan. 25 to Aug. 1.
Intel had no immediate comment.
The lawsuit came after Intel said last Thursday it wouldlay off more than 15% of its workforce, or more than 15,000 jobs, and suspend its dividend starting in the fourth quarter as part of a restructuring meant to save $10 billion in 2025.
Intel also posted a $1.61 billion second-quarternet loss, as revenue fell 1% to $12.83 billion.
The company has struggled to fend off competition from rival chipmakers and benefit from growth in artificial intelligence.
Among its rivals are Advanced Micro Devices AMD.O, Nvidia NVDA.O>, Samsung Electronics 005930.KS and Taiwan's TSMC 2330.TW.
Intel's share price tumbled 26% to $21.48 on Aug. 2, the day after it announced quarterly results, the job cuts and the dividend suspension.
The shares closed Wednesday down 3.6% at $18.99 and have fallen 34.6% since the announcement.
The case is Construction Laborers Pension Trust of Greater St. Louis v Intel Corp, U.S. District Court, Northern District of California, No. 24-04807.
Reporting by Jonathan Stempel in New York; Editing by Chris Reese and David Gregorio
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