Well things don’t seem to be getting any better for AMD. It looks like they will be facing a securities fraud lawsuit. Apparently over-promising and under-delivering on its very first APU, codenamed “Llano” is coming back to haunt the company.
Back in Q3 of 2012 AMD launched their A-Series “Llano” APUs and they went largely unsold due to various reasons such as lack of real interest in the product, competition from Intel and much more. Because of this the company went ahead and launched their “Trinity” APU too soon.
Because of the overwhelming inventory of unsold “Llano” APUs there was an inventory writedown of $100 million, this reduced the worth of the company by nearly that almost overnight, which tanked the value of the AMD stock. A class action lawsuit was filed by AMD investors and stock holders in 2014. This new securities fraud suit claims that AMD misrepresented the production of “Llano” chips to its investors despite having supply issues from GlobalFoundries its supply partner. This in-turn artificially inflated the value of the company in 2011-12. By the time the production finally caught up, they ended up overproducing resulting in unsold inventory, and in turn, the $100 million writeoff.
Advanced Micro’s shares fell nearly 74 percent from a peak of $8.35 in March 2012 to a low of $2.18 in October 2012 when the market learned the extent of the problems with the Llano launch, the lawsuit said.
The lawsuit seeks damages on behalf of the Arkansas Teacher Retirement System, Belgium-based KBC Group’s KBC Asset Management and other investors who bought the company’s shares between April 2011 and October 2012.