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

[Agatong]

 

Summary

It appears that Intel's technical challenges with its 7nm process will be complicated by legal challenges as well. The Hagens Berman law firm issued a press release on Friday calling for investors impacted by Intel's recent stock market losses to join a potential class-action lawsuit for investors fraud. The firm also "encourages persons who may be able to assist the Firm's investigation of possible securities fraud to contact the firm."

Intel's announcement of a delay to its 7nm process sent shockwaves through the semiconductor industry last week as the company grapples with yet another delay to a process node, leading its stock price to plummet 16% over the weekend as it shed roughly $43 billion in market cap. Bernsteins noted that Intel's most recent earnings call was 'the worst we have seen in 42 years covering Intel" and that the stock is "basically un-ownable." Naturally, investors are unhappy, and the Hagens Berman law firm encourages impacted parties that held the stock before July 23, 2020, to submit their losses for possible inclusion in a class-action lawsuit. 

 

Quotes

 

Quote

The potential class action lawsuit adds yet another task for Intel's legal machine. Intel's most recent Form 10-Q [PDF] lists several ongoing lawsuits that could impact the company, and the company says it cannot "make a reasonable estimate of the potential loss or range of losses" for several of the suits. Those include 'multiple' ongoing lawsuits for the Spectre/Meltdown vulnerabilities that have been lodged in U.S. federal and state courts (and in "certain" courts in other countries) against Intel and some of its current and former executives and directors. Intel also lists an ongoing lawsuit from the Chinese Academy of Sciences for patent infringement, along with another patent infringement suit from VLSI Technology. Intel also continues to argue the details of its 2001 lawsuit for unfair business practices against AMD. 

 

My thoughts

It has not been a good few weeks for Intel, with there stock dropping, not keep promises, rearranging the upper staff once again, they need to stop looking at dollar signs and start looking to make good products again.

 

Sources

https://www.tomshardware.com/news/intel-7nm-delay-law-firm-securities-fraud-investigation-class-action#xenforo-comments-3631578

[5x5]

Bye Intel stock prices.

[Lurick]

Lawsuits go brrrrr

Intel stock go boom

[2FA]

The vultures have begun to circle...

[SupaKomputa]

Bring back the sandy bridge intel!

16% poorer.

[5x5]

13 minutes ago, Lurick said:

Lawsuits go brrrrr

Intel stock go boom

[spartaman64]

well hopefully their 10nm arrives on time or else they would definitely get sued big time after denying delays

[Master Disaster]

I'm confused as to where they think the fraud took place. Did Intel make specific promises to investors? Is this just a bunch of rich people getting litigious because they lost money on the stock market?

 

I thought the entire point of the stock market was sometimes you win, most of the time you lose?

[5x5]

1 minute ago, spartaman64 said:

well hopefully their 10nm arrives on time or else they would definitely get sued big time after denying delays

Well, 7nm desktop is on life support from what I've been told. Earliest it could come is 2021 Q4 or Q1 2022 soooo, we may never even see desktop 10nm if things with 7nm are going this way.

[5x5]

2 minutes ago, Master Disaster said:

I'm confused as to where they think the fraud took place. Did Intel make specific promises to investors? Is this just a bunch of rich people getting litigious because they lost money on the stock market?

 

I thought the entire point of the stock market was sometimes you win, most of the time you lose?

In short - they want to know if Intel execs or investors dumped a bunch of stock before the info went public. Basically, it's an investigation into whether select individuals abused their status to get rich before the stock plummets.

[Master Disaster]

1 minute ago, 5x5 said:

In short - they want to know if Intel execs or investors dumped a bunch of stock before the info went public. Basically, it's an investigation into whether select individuals abused their status to get rich before the stock plummets.

Ahh, fair enough then.

[Master Disaster]

Just now, huilun02 said:

> Loses money in stocks

> Sues for "securities fraud"

 

Lolwut

Yeah, its 100% insider trading but I think fraud is pushing it a bit too far.

[5x5]

6 minutes ago, Master Disaster said:

Yeah, its 100% insider trading but I think fraud is pushing it a bit too far.

insider trading is a form of fraud

[porina]

37 minutes ago, 5x5 said:

Bye Intel stock prices.

Virtual assistant: "Buy Intel stock" executed. 

 

10 minutes ago, Master Disaster said:

I'm confused as to where they think the fraud took place. Did Intel make specific promises to investors? Is this just a bunch of rich people getting litigious because they lost money on the stock market?

Unfortunately this is largely unavoidable for bigger businesses. Someone will have a go somewhere. Big drops in stock price often triggers some kind of action from stockholders.

 

10 minutes ago, Master Disaster said:

I thought the entire point of the stock market was sometimes you win, most of the time you lose?

If you play the long game most of the time you'll come out ahead. Short term trading is much more risky but that's another story.

 

8 minutes ago, 5x5 said:

Basically, it's an investigation into whether select individuals abused their status to get rich before the stock plummets.

Insider trading is a big deal if proven. You don't get to exec level without knowing what it is and how not to do it. There will be processes in place to prevent accidentally doing that, but like many things, it isn't always black and white and potential wrongdoing can come down to interpretation.

[Lakobrija]

I wonder if Intel will be good stock buy after few years when they get their shit together and start to be Intel again.

[asquirrel]

"Whaaaa Whaaaaaa. My stonk lost money! Investing is supposed to only go UP! Not down! Someone call the Whaaambulance!"

 

But also, yea, insider trading also happened. Intel has been digging their own grave for years. Dell/EMC did the same things too. It fills my little coal-black heart with joy to see them reaping the rewards of their shitty behavior.

[CTR640]

Can someone enlighten me on what insider trading means? From the sounds of it, it doesn't sound legal.

 

And stocks always have been a big risk as they are too unpredictable.

[ThePD]

Insider trading is the purchase or selling of stocks before good/bad news is released to the public (aka investors). An example would be, Intel execs know that they are having the worst quarter in the company history, so they sell millions in stock before they release that information to the public when the market would have naturally reacted. This allows the execs to sell at a max price before the stock tanks.

It also works in the opposite, if you know your company is going to have record profits, and you mass purchase stocks before that information is released, that is also considered insider trading.

[porina]

1 hour ago, CTR640 said:

Can someone enlighten me on what insider trading means? From the sounds of it, it doesn't sound legal.

In the generalised case, US stocks are meant to be traded with fair and equal access to information that affects stock price. This is in part why companies have to be careful how they release information, and the information should be truthful. Elon Musk was negligent in that in his $420 tweet for example. I still think he got off very lightly for that.

 

Insider trading is making use of information that is not public yet in order for yourself to gain a profit. This can also include selectively giving that information to others to use. This makes it more difficult for high level management to trade stocks in their own company, since almost by definition they will know things the general public don't. That's not to say there aren't ways legally around it, but they will typically have legal advice on what they can do, and when.

[Yashiees]

Hi this is a bit weird, But I dont understand 1 word thats going on and whats happening.

 

 

But for some reason i'm interested?/

 

 

can anyone explain in a simple "ok they did this and this is going to happen and what they did" way? Thank you.

 

 

sorry 2 disturb

[5x5]

5 minutes ago, Yashiees said:

Hi this is a bit weird, But I dont understand 1 word thats going on and whats happening.

 

 

But for some reason i'm interested?/

 

 

can anyone explain in a simple "ok they did this and this is going to happen and what they did" way? Thank you.

 

 

sorry 2 disturb

Investigation into whether Intel executives abused their positions to get rich before the intel stock price drops because of their repeated failures with regard to the development of new litography nodes.

[Mister Woof]

corrupt businessmen

 

who woulda thunk it

[Master Disaster]

4 hours ago, CTR640 said:

Can someone enlighten me on what insider trading means? From the sounds of it, it doesn't sound legal.

 

And stocks always have been a big risk as they are too unpredictable.

Example: Intel boss knows a bad announcement is coming that will affect stock prices  in a significant way so the day before the announcement is made to the shareholders/public that boss sells all his stocks (and/or tells others to sell theirs too) at a high price.

[pas008]

12 minutes ago, Master Disaster said:

Example: Intel boss knows a bad announcement is coming that will affect stock prices  in a significant way so the day before the announcement is made to the shareholders/public that boss sells all his stocks (and/or tells others to sell theirs too) at a high price.

i believe there are rules in place and they must file with sec also?

 

wasnt there a conversation on this before here?

 

cant remember

[Kisai]

12 hours ago, Master Disaster said:

I'm confused as to where they think the fraud took place. Did Intel make specific promises to investors? Is this just a bunch of rich people getting litigious because they lost money on the stock market?

 

I thought the entire point of the stock market was sometimes you win, most of the time you lose?

The stock market isn't gambling, at least not in the context you basically described "sometimes you win, most of the times you lose"

 

A proper stock trader (eg, not a day trader ignoramus or high speed trading robot) researches the companies before putting money into them, and then hopes to either sell at a higher valuation, or collect dividends.

 

Stocks that pay dividends are more immediately valuable to long-term people who want to see results, and high speed trading can't typically wreck it. The ability to short-sell a stock results in these rapid changes in stock price, and a company can quite literately have it's market cap driven below it's net present value, from a feedback effect of high speed trading amplification behaving irrationally.  Trading algorithms are easily manipulated by idiots on Twitter linking to fake news about companies, and you need to look no further than the stock symbol on twitter to see stuff like that. 

 

Anyhow, I don't particuarly see a case for fraud unless they're going to frame it as "Intel new the 10nm and 7nm nodes were a waste of money, and proceeded to promise the shareholders that they were going to be ready, when they were really going to have to abandon some/all of it."

 

By all accounts, Intel is a full two nodes behind by the time they release anything, so if they're not going to be releasing 5nm chips in 2021, they are going to get spanked real hard by AMD, since OEM's will have had plenty of notice to get-out-now.