I just read that Dellâ€™s investors have proceeded with a class action lawsuit against the company alleging that the company has been using improper accounting and business practices with Intel that added up to about one billion dollars a year. Yes, you heard me right. We are talking one billion dollars each year here as this was apparently not a one time incident.
In a nutshell, the background story is that apparently Intel had secretly paid Dell to ensure that Intel would maintain its exclusivity on Dell computers. The lawsuit claims that towards the end of Dellâ€™s fiscal quarters Intel would provide Dell with some form of compensation which ultimately affected Dellâ€™s operating profits margin. Some investors are saying that by doing this the company is simply manipulating the real value of the company and that it is misleading its investors. Should be interesting to see how this plays out.