On September 14, 2018, the initial complaint in this securities class action was filed against Microchip Technology Incorporated (“Microchip”), and certain of Microchip’s directors and officers, asserting violations of sections 10(b) and 20(a) of the Securities Exchange Act.
The complaint alleged that, during the class period, Microchip represented that its acquisition of Microsemi Corp. (“Microsemi”) would be “immediately accretive” by increasing Microchip’s earnings per share. Microchip’s CEO 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, Microchip's CEO 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. The complaint alleged that the defendants’ statements during the class period were materially false and misleading and that Microchip had done inadequate due diligence and was unable to make any statements concerning whether the Microsemi acquisition was “immediately accretive.”
This securities class action lawsuit was brought on behalf of all persons who purchased or otherwise acquired Microchip common stock during the class period March 2, 2018 through August 9, 2018, inclusive.
Current Status of Case:
On March 11, 2020, the Court granted in part and denied in part the defendants’ motion to dismiss the complaint, thereby allowing the action to proceed. On September 11, 2020, the lead plaintiff filed a motion for class certification. The defendants’ filed a Response and Statement of Non-Opposition to Plaintiff’s Motion for Class Certification on October 16, 2020. The motion for class certification has been fully briefed pending the Court’s decision.
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