Intel. Could Things Get Any Worse? You Bet. Here's How.

August 2024 was arguably the worst month in the company's entire history

Apparently, August 2024 was one of the hottest months on record. The heat was certainly being felt by Intel’s leadership team in the wake of their calamitous Q224 results and outlook. Quite apart from the fact that the company’s share price now sits at levels first seen over three decades ago, there’s a plethora of other challenges facing the company.

Let’s start with the two newly launched class action lawsuits. The first relates to an oxidation issue that’s causing instability & crashes in an ever-growing number of Intel processors. The second was filed by a pension trust which feels that Intel’s CFO and CEO may have misled them into thinking that things at the company were going a lot better than they actually were.

Then there’s the potential threat of an activist investor getting involved in a similar fashion to what Daniel Loeb did some four years ago. Just for kicks, here’s the letter he sent Intel back then. He could basically use the same letter again this time around, should he chose to get involved. This CNBC report suggests that Intel has retained the services of Morgan Stanley, among others, to defend itself against possible activist investor moves.

There’s also the resignation of board member Lip-Bu Tan, allegedly for “personal reasons”. He was a very important board member, elected just two years ago for his wealth of semiconductor experience, details from the Intel press release here.

His sudden resignation was bad enough, but the rumours after his departure about the extent of his disagreements with Mr. Gelsinger and other members of the board, are damming if only even partly true.

Last but not least, Mr. Gelsinger’s comments at last week’s Deutsche Bank event seem to imply that Intel’s August meltdown was part of his plan all along. Indeed, he stated that his turn around plan had always focused on returning the company to process technology leadership first and only then firing 15,000 of the employees who had worked on achieving that goal. This, along with other revisionist comments he has been making, expose both himself and the company to further legal action. Has he completely lost his marbles? Let’s dig in….