Jackson v. Microchip Technology, Inc. et al 2:18-cv-02914-ESW — On September 14, 2018, investors sued Microchip Technology, Inc. (Microchip, MCHP, or the Company) in United States District Court, District of Arizona. Plaintiffs in the MCHP class action allege that they acquired Microchip stock at artificially inflated prices between March 2, 2018 and August 9, 2018 (the “Class Period”). They are now seeking compensation for losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information about the MCHP Lawsuit, please contact us today.

Summary of the Allegations

Company Background

The Company (NASDAQ: MCHP) bills itself as a “leading provider of microcontroller, mixed-signal, analog and Flash-IP solutions.” As such, it says it provides “low-risk product development, lower total system cost and faster time to market for thousands of diverse customer applications worldwide.”

According to its website, Microchip’s products are used in numerous industries ranging from aerospace and defense to the automotive industry and computing.

Microchip is based in Chandler, Arizona and incorporated in Delaware.

Summary of Facts

Microchip and two of its senior officers  (the “Individual Defendants”) are accused of deceiving investors by lying and withholding critical information about the Company’s business practices and prospects during the Class Period.

Specifically, they are accused about omitting truthful information about Microchip’s acquisition of Microsemi Corp. (“Microsemi”) from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Microchip stock to trade at artificially inflated prices during the time in question.

The truth emerged on August 9, 2018, when the Company announced its financial results for the quarter that ended on June 30, 2018. These results “included one month of Microsemi’s operating results (from the date of acquisition).”

In a conference call held after the announcement that day, one of the Individual Defendants “acknowledged that Microchip’s duel diligence on Microsemi prior to the acquisition had been in adequate and that much of Microsemi’s revenue reported prior to the merger was not supported by end user demand, but rather resulted from excess distribution into the channel.”

During the August 9 conference call, Microchip also announced that it anticipated lower revenue for the second fiscal quarter of 2019 than previously expected. Analysts then identified the “cause of the revenue shortfall as Microsemi’s aggressive pre-acquisition recognition practices.”

A closer look…

As alleged in the September 14 complaint, the Company and/or Individual Defendants repeatedly made false and misleading public statements during the Class Period.

For example, in a March 1, 2018 press release in which Microchip announced it had “signed a definitive agreement to acquire Microsemi Corp., one of the Individual Defendants said in relevant part: “Microchip and Microsemi have a strong tradition of delivering customers and markets, thus creating highly valued and long-lasting revenue streams.”

Then, at an Investor Day presentation held the same day, one of the Individual Defendants stated in pertinent part: “Microsemi was ‘the first company we’re buying in our string of acquisitions, where their gross margin is higher than us…’”

Finally, in a press release issued on May 31, 2018, the Company also stated in relevant part: “Microchip expects Microsemi to add $160 million to $180 million to its June quarter results, and now expects consolidated non-GAAP net sales for the June quarter to be up 17% to 24% sequentially.”

Impact of the Alleged Fraud on Microchip’s Stock Price and Market Capitalization

The following chart illustrates the stock price during the class period:

Actions You May Take

If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.

NOTE: The deadline to file for lead plaintiff in this class action is November 16, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.

In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Microchip common stock using court approved loss calculation methods.

Recently Filed Cases

Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action.  Please contact us if you would like an LK report for any of these cases:

About Us

Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse.  With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.

Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients.  Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.

For additional information about this case or our institutional services, please contact us.