Teeth make smiles, and smiles make sales - Unidentified Harrods person in Alan Sugar's The Apprentice
CHIP DESIGNER AMD is being sued by investors who claim that it over-egged its Llano sales reports and figures.
The firm is accused of making some bold claims about the prospects for its Llano processors and overestimating how well it might compete in emerging markets.
Complainants have filed a class action lawsuit against the firm, and investors in AMD between 27 October 2011 and 18 October 2012 are represented by Robbins Geller Rudman & Dowd LLP. The law firm confirmed the suit, saying in a post on its website that it filed the complaint last Thursday.
"On January 15, 2014, Robbins Geller Rudman & Dowd LLP filed a complaint alleging violations of the federal securities laws by Advanced Micro Devices, Inc. and certain of its officers and/or directors," it said.
"The class action was commenced in the United States District Court for the Northern District of California on behalf of purchasers of AMD common stock between October 27, 2011 and October 18, 2012 (the 'Class Period')."
The complaint alleges that the investors were let down by the company and its Llano predictions. It claims that investors were tempted by expectations for Llano that AMD never lived up to.
"Defendants falsely and misleadingly represented that AMD's desktop business was in a 'strong position' and that it would 'continue to rebound' in 2012," it claims.
"As late as April 19, 2012, defendants stated that the demand for the Llano APU was 'higher than anticipated', particularly in the 'emerging markets' and that there were no 'significant issues' in the important desktop market."
However, by the summer of 2012 the firm had revised its financial reports, and posted a drop in quarterly earnings of 31 percent in the autumn and a $100m write-off. AMD's share price fell by a quarter of its value.
"On October 18, 2012, the Company announced that its gross margins for the fiscal 2012 third quarter had declined more than 31 [percent] 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," adds the complaint. "On this news, the price of AMD stock declined nearly another 17 [percent] on extremely heavy trading volume."
AMD told the INQUIRER that it is aware of the lawsuit. "We are aware of the complaint, and are confident that the company's actions and statements were consistent with its obligations under the securities laws," said a company spokesman. µ
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