Wolf Popper LLP Files Amended Complaint Against Microchip Technology Inc.
On February 22, 2019, Wolf Popper filed an Amended Class Action Complaint for Violation of the Federal Securities Laws against Microchip Technology, Inc.; Microchip’s CEO Steven Sanghi; Microchip’s President and COO Ganesh Moorthy; and Microchip’s CFO J. Eric Bjornholt. The Complaint was filed on behalf of Court-appointed Lead Plaintiff Ronald L. Jackson and a proposed class of those who purchased Microchip common stock on a U.S. open public market between March 2, 2018 and August 9, 2018.
The Complaint alleges that Microchip and the individual defendants made materially false and misleading statements concerning the Company’s acquisition of Microsemi Corp. in 2018, which was financed by cash at hand and $8.6 billion in new debt. Among other things, the Complaint alleges that Defendants failed to disclose that Microsemi had higher inventory levels in the distribution channel than what Defendants believed were appropriate, and that Defendants misrepresented the expected cash flow and net debt leverage of the combined company. The Amended Complaint alleges that Defendants made their false statements in order to mitigate the interest charges on the debt, and to accelerate the closing of the merger.
On August 9, 2018, Microchip disclosed that Microsemi had excess inventory in its distribution channel, and that, as a result, Microchip would sell fewer Microsemi products into the channel in the upcoming months, reducing its net cash flow by approximately $110 million, reducing its ability to pay down debt, and resulting in net debt leverage of 5.0x EBITDA as opposed to 4.7x EBITDA. As a result, Microchip stock fell $10.67 per share.
Wolf Popper Appointed Lead Counsel in Microchip Technology Securities Litigation
On December 11, 2018, Judge John J. Tuchi of the United States District Court for the District of Arizona appointed Roland L. Jackson lead plaintiff and Wolf Popper LLP lead counsel for the proposed class in the securities class action against Microchip Technology Inc. and its CEO Steven Sanghi and President Ganesh Moorthy. The Court also appointed Bonnett Fairbourn Friedman & Balint P.C. as liaison counsel for the proposed class. The litigation, titled Jackson v. Microchip Technology Inc., No. 18-cv-02914-ESW, alleges that the Defendants made materially false and misleading statements concerning Microchip's acquisition of Microsemi Corp. in 2018.
Wolf Popper LLP Files Class Action Lawsuit Against Microchip Technology Inc.
NEW YORK, September 17, 2018
Wolf Popper LLP has filed a class action lawsuit against Microchip Technology Inc. (NASDAQ: MCHP) and certain of its officers, in the United States District Court for the District of Arizona (2:18-cv-02914-ESW) on behalf of all persons who purchased or acquired Microchip common stock on the open market, during the period March 2, 2018 through August 9, 2018, and were damaged thereby. This action alleges claims for violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
If you are a member of the Class, you may file a motion no later than November 16, 2018 to be appointed lead plaintiff. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Investors who purchased Microchip common stock during the Class Period and suffered losses are urged to contact Wolf Popper to discuss their rights.
On March 1, 2018, Microchip announced that it would acquire Microsemi Corp. for $8.35 billion. On May 29, 2018, Microchip announced the completion of the Microsemi acquisition.
During the Class Period, Microchip represented that the Microsemi acquisition would be "immediately accretive" by increasing Microchip's earnings per share as it "will add further operational and customer scale to Microchip." Microchip's CEO Steven Sanghi represented that the "deal is accretive on day one without doing anything, without any synergy," and was "strategically and financially, a very compelling transaction."
On August 9, 2018, Sanghi admitted that Microsemi "was extremely aggressive in shipping inventory into the distribution channel" which "will provide some headwind for revenue for the next couple of quarters" for Microchip. As a result, Microchip common stock declined $10.67 or nearly 11% on August 10, 2018.
Wolf Popper has successfully recovered billions of dollars for defrauded investors. The firm's reputation and expertise have been repeatedly recognized by the courts, which have appointed the firm to major positions in securities litigation. See www.wolfpopper.com.
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