Class Action Suit Filed Against Advanced Micro DevicesThu, Jan 16, 2014 - 7:56 PM
A class action suit has been filed against AMD on behalf of investors who purchased Advanced Micro Devices (AMD) common stock between October 27, 2011 and October 18, 2012. The complaint says that AMD violated the Securities Exchange Act of 1934 by saying that their Llano APU was doing good at one point in time and then later said there was weak demand for the APU. We’ll have to see what happens with this case, but for now it is up to the lawyers and the courts to sort out!
“The complaint charges AMD and certain of its officers and directors with violations of the Securities Exchange Act of 1934. AMD is a multinational semiconductor company that develops computer processors and related technologies for commercial and consumer markets.
The complaint alleges that during the Class Period, defendants made false and misleading statements about the Company’s business and prospects. Specifically, the complaint alleges defendants made false statements and/or concealed adverse facts regarding AMD’s 32 nanometer Llano (the “Llano”) Accelerated Processing Unit (“APU”), which is a type of microprocessor that combines AMD’s central processing unit and its graphics processing unit onto a single piece of silicon, including repeatedly highlighting the “strong” and “significant” interest in, demand for, and unit shipments of, the Llano APUs, and falsely and misleadingly representing that AMD’s desktop business was in a “strong position” and that it would “continue to rebound” in 2012. As a result of defendants’ false statements, AMD stock traded at artificially inflated prices throughout the Class Period.
In July 2012, AMD announced that weak demand for Llano APUs in desktop devices, particularly in its Chinese and European markets, had resulted in AMD’s reporting of lower than expected revenue for the June 30, 2012 quarter. The revelation of this information caused the price of AMD stock to decline by nearly 25% on extremely heavy trading volume. Then on October 18, 2012, the Company announced that its gross margins for the fiscal 2012 third quarter had declined more than 31% from its previous quarter, in large part due to AMD’s recording of an approximate $100 million inventory write-down, mainly attributable to the overstated value of the Llano. On this news, the price of AMD stock declined nearly another 17% on extremely heavy trading volume.
Plaintiff seeks to recover damages on behalf of all purchasers of AMD common stock during the Class Period (the “Class”).”