Posted on Friday, January 17 2014 @ 12:03 CET by Thomas De Maesschalck
Robbins Geller Rudman & Dowd, the same firm that's going after EA over Battlefield 4's buggy launch, has filed a class action lawsuit against AMD for allegedly misleading investors regarding how popular the first-generation Llano desktop APUs would be. The lawyers claim AMD inflated its stock price repeatedly highlighting the strong and significant interesting Llano but that it became clear when AMD announced its Q2 2012 results that Llano failed to deliver.
The law firm detailing its suit writes:
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.
Source: TPU
