Microchip Technology Inc.
- Company Name
- Microchip Technology Inc.
- Stock Symbol
- Class Period
- March 2, 2018 to August 9, 2018
- Motion Deadline
- November 16, 2018
- District of Arizona
The complaint charges Microchip and certain of its officers with violations of the Securities Exchange Act of 1934. Microchip is a provider of microcontroller, mixed-signal analog, and Flash-IP solutions, which provide low-risk product development, lower total system cost and faster time to market for diverse customer applications worldwide. 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.
The complaint alleges that during the Class Period, defendants made false and misleading statements regarding the Microsemi acquisition, including that it would be “immediately accretive,” increasing Microchip’s earnings per share by “add[ing] further operational and customer scale to Microchip,” that the deal would be “accretive on day one without doing anything, without any synergy,” and that “strategically and financially, [it was] a very compelling transaction.” As a result of defendants’ false statements, Microchip securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $103 per share.
Then on August 9, 2018, Microchip announced its financial results for the first quarter of fiscal 2019. The press release announcing the results stated that the Company’s financial performance for the quarter ended June 30, 2018 had been “adversely impacted by $226.9 million of Microsemi purchase accounting, restructuring, and other charges.” In a conference call the same day discussing the Company’s results, Microchip’s CEO, Steven Sanghi, admitted that Microsemi “was extremely aggressive in shipping inventory into the distribution channel,” which would “provide some headwind for revenue for the next couple of quarters” for Microchip. As a result, the price of Microchip common stock declined $10.67 per share, or nearly 11%, to close at $87.41 per share on August 10, 2018.