Thursday, January 16th 2014
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AMD Sued for Overestimating APU Success to Investors
Some investors in AMD, who purchased company stock between October 27, 2011 and October 18, 2012, filed a class action lawsuit against AMD, through law firm Robbins Geller Rudman & Dowd. The class action alleges that AMD and its officers and directors committed violations of the US Securities Exchange Act of 1934. AMD allegedly misled its investors over how popular its first generation "Llano" desktop APU would get, claiming that there were much greater prospects for the APU than it actually ended up selling.The law firm detailing its suit writes:
The Plantiff seeks to recover damages, who are represented by Robbins Geller, a firm that specializes in class action suits against companies that mislead their investors in a very big way. It would be interesting to see how this case plays out, given that readers of content on sites like ours most likely knew how fast AMD's K10 CPU and VLIW5 GPU architectures were (given that they had each driven AMD's product stack for several years), and what to expect from Llano, way back in 2011.
Sources:
Robins Geller Rudman and Dowd LLP, BeHardware
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.When AMD announced its Q2-2012 results in July of that year, it became clear that there really wasn't the kind of demand for the APU that AMD was playing up, AMD in its IR release stated that the markets where it most expected the APU to sell - China and Europe, had lukewarm reception of "Llano." This caused a fire-sale of AMD stock, when it saw a fall by almost 25 percent on extremely heavy trading volume. In the following quarter, on October 28, 2012, AMD announced a decline in its gross margins for Q3 2012 declined 31 percent QoQ, due in part to the $100 million inventory write-down, following which AMD stock declined another 17 percent in a flash.
The Plantiff seeks to recover damages, who are represented by Robbins Geller, a firm that specializes in class action suits against companies that mislead their investors in a very big way. It would be interesting to see how this case plays out, given that readers of content on sites like ours most likely knew how fast AMD's K10 CPU and VLIW5 GPU architectures were (given that they had each driven AMD's product stack for several years), and what to expect from Llano, way back in 2011.
52 Comments on AMD Sued for Overestimating APU Success to Investors
....and just how inflated was the price of stock ......
Me smells lots of butthurt "investors" (there's always a risk involved with investments).
AMD like most companies have no crystal ball. They can only state what they believe to be true at a specific point in time. Unless they knowingly misled investors this suit will be dismissed.
That being said, AMD could stand to learn a little more about the merits of under promising and over delivering because their longstanding strategy of doing exactly the opposite is really starting to damage their credibility.
If you bothered reading it. Its a complaint by just 2 guys [Babak Hatamian and Lussu Dennj Salvatore]. There calling for more people to join in the suit.
Reading more of the filing it just seams they bought at the wrong time. In the report they site that prior Quarter before they purchase stock AMD was up 8%.
They're on fire :roll:
Grossly misleading is me selling you a stock for a company and then I just run off with your money cause the company never really existed. That is a f*$@ing crime.