Intel hits its worst day since 2013: Stock plummets 26%
Intel Corporation has experienced a 26% overnight drop in its stock value, to end at $21.48, its lowest since 2013. This significant decrease erased over $30 billion from the company's market capitalization, which now stands at $96.76 billion. The sudden fall in Intel's stock value is linked to allegations that it has been selling defective 13th and 14th-generation chips. The company previously reported big earnings miss in the second quarter, and announced a massive restructuring.
Take a look at Intel's m-cap
When New York Stock Exchange (NYSE) closed on July 31, Intel's market capitalization was $130.86 billion. However, following the publication of a report on Intel's significant layoffs, its market cap fell sharply to $123.96 billion on August 1. After Intel's recent financial report, its capitalization further declined to $91.86 billion, marking a nearly 50% drop since January. Currently, Intel's market value is a fraction of NVIDIA's and less than half of AMD's.
Refusal to remove affected products from sale
Despite acknowledging the issues with the chips and committing to resolve them through a software update, Intel has stirred controversy by refusing to remove the affected products from sale or initiate a product recall. This decision has led to further scrutiny of the company's actions.
Class-action lawsuit over Raptor Lake issue
In addition to the stock market woes, Intel is now facing a class-action lawsuit regarding its handling of the Raptor Lake situation. The company recently confirmed that it's extending its warranty by two years. The plaintiffs in this case have raised doubts about whether Intel is actually fulfilling its two-year extended warranty promise. Currently, testimonies are being gathered to determine the extent of consumer impact caused by this bug.
Q2 loss and global layoffs
Intel reported a significant loss for the second quarter following which it planned to deal with internal challenges. The company recently announced it is laying off 15,000 employees globally due to a second-quarter loss. This announcement may have contributed to the sharp drop in the company's stock value. Despite an impressive lineup of future products, these recent developments could potentially damage consumer trust and impact future sales of the chipmaker.
