This investor blew nearly $300,000 on Intel shares the day before 7nm disaster reveal. Yup, she's suing
- Reference: 1596051058
- News link: https://www.theregister.co.uk/2020/07/29/intel_shareholder_lawsuit_tk/
- Source link:
The complaint
[2]PDF
, filed in a US federal district court in San Francisco against Intel, CEO Bob Swan, and CFO George Davis, alleges that Silicon Valley stalwart and its executives made false and misleading statements about Intel's product development pipeline and violated the US Securities and Exchange Act.The lawsuit was brought on behalf of investor Cheryl Huang, who purchased 4,700 Intel shares at around $60 a share, totaling $285,000, on July 22 and 23. She's seeking class-action status, which could open up a whole barrel of financial hurt for the chip maker.
Following Intel's latest earnings report on the afternoon of July 23, and the accompanying revelations of 7nm delays and defects, the chip maker's share value declined precipitously. Intel shares are now selling for about $48, down 20 per cent from last week, which translates to a theoretical loss of about $56,000 for the plaintiff.
The basis of the complaint is that Intel's general SEC disclosures on January 24, 2020 about operational risk failed to mention that it had identified specific 7nm production problems.
Intel's 7nm is busted, chips delayed, may have to use rival foundries to get GPUs out for US govt exascale super [3]READ MORE
The court filing says that Intel failed to disclose to investors that: it "had identified a defect mode in its 7-nanometer process that resulted in yield degradation"; that 7nm products would be delayed six months; that Intel was likely to turn to third-party foundries for help making those products; that it was likely to lose market share to competitors already selling 7nm chips; and that as a result, company statements about its prospects were misleading.
During Intel's conference call for investors last week, Swan said that with the identification of an unspecified 7nm production problem and that there "are no fundamental roadblocks" to produce 7nm processors. Even so, he acknowledged that the company has "invested in contingency plans to hedge against further schedule uncertainty."
"We will continue to invest in our future process technology roadmap, but we will be pragmatic and objective in deploying the process technology that delivers the most predictability and performance for our customers, whether that be on our process, external foundry process, or a combination of both," said Swan.
Swan did not name a specific external foundry but the leading contender for that contract is Taiwanese chip makers TSMC. According to reports in DigiTimes and [4]China Times , Intel has already struck a deal with TSMC to fabricate dies using a 7nm node and beyond. A subsequent report from [5]Wccftech claims Intel's Ponte Vecchio GPU will be made using Intel 7nm and TSMC 5nm components.
On Monday, Intel announced that its chief engineering officer Venkata "Murthy" Renduchintala will [6]leave the company on August 3, 2020 and that his position will be eliminated in a restructuring that has company department heads within Intel's Technology, Systems Architecture and Client Group reporting directly to the CEO. ®
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[1] https://www.theregister.com/2020/07/24/intel_7nm_chip_slip/
[2] https://regmedia.co.uk/2020/07/29/intel7nmlawsuit.pdf
[3] https://www.theregister.com/2020/07/24/intel_7nm_chip_slip/
[4] https://www.chinatimes.com/newspapers/20200727000134-260202
[5] https://wccftech.com/exclusive-intel-ponte-vecchio-gpu-not-on-tsmc-6nm/
[6] https://www.theregister.com/2020/07/27/intel_engineering_boss_out/
[7] https://whitepapers.theregister.com/
Re: I'm shocked
Try rubber gloves...
Hang on a sec
She knew it was the day of the earning report and she bet wrong and she's sueing? WTF
Re: Hang on a sec
Simple. She's entitled.
Buying on day of quarterly report
Probably expected the share price to go up. Buy low, sell high, etc.
C.
Re: Buying on day of quarterly report
Probably expected the share price to go up. Buy low, sell high, etc.
C.
Deep insight into investing here.
Re: Hang on a sec
She took a gamble.
If you've ever been on a revenue call, they always talk about full disclosure (rule FD) and forward looking statements.
This is a nuisance lawsuit but watch it grow.
Sucks to be intel now.
Re: Hang on a sec
If I was the opposing attorney, I'd subpeona her investment records and look for any time she made a big purchase of a stock before an earnings announcement that turned out well and caused the stock to soar. For each instance I'd ask if she mailed a check for that gain to the company in question.
Lunatic bet on a surprise result (this is not a surprise to anyone who watches the stock). Now looks like a twat. Tries to deflect blame anyway possible (when put in charge of other people's money, trust is important).
Fuck me, I barely follow Intel and haven't got any shares, but even I knew AMD, Apple and Arm are killing intel. A cursory search would show this.
What a muppet! She was just hoping there would be good news and a 10% jump over night... Any fool would have known what was coming.
Bet she wishes she'd bought AMD shares when they are rock bottom at 2.50 USD....
Christ I hadn't seen the AMD share price.
Did she ignore Intel's main competitor rising 3800% in 3 years?
I hope this drags and drags and drags and she loses, and is liable for all the legal bills.
Buyer's remorse is no foundation for a legal case.
Caveat emptor and all that.
I'm not even sure it's buyer's remorse. I think she likes to playheads I win, tails I don't lose.
No, heads the lawyers in, tails the lawyers win and you get a $2 discount voucher on a 15th gen Core i11 cpu.
Intel admission of risks . . . in 2015
So she's basically saying she was stupid and wants her money back (as the lawyers lick their chops).
Had she read any of Intel's filings she would have seen the following risk:
"We are subject to risks associated with the development and implementation of new manufacturing process technology. We may not be successful or efficient in developing or implementing new production processes. Production of integrated circuits is a complex process. We are continually engaged in the transition from our existing process to the next-generation process technology. This consistent innovation involves significant expense and carries inherent risks, including difficulties in designing and developing next-generation process technologies, development and production timing delays, lower than anticipated manufacturing yields, and product defects and errata."
This is from their 2015 annual filing with the Securities and Exchange Commission and in subsequent years.
In May Intel said 7nm wouldn't happen until at least 2021.
They had problems going to 10nm as well.
https://www.theregister.com/2018/12/12/intel_architecture_future/
Re: Intel admission of risks . . . in 2015
Every tech channel on youtube has been taking the piss out of Intel for this same thing not being able to produce a 7nm chip for months probibly the investor press aswell so what did she think was going to happen to their share price?
I'm shocked
I tell you, I'm shocked