Silicon Motion Technology Corporation Class Action Lawsuit

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Case Summary

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Robbins Geller Rudman & Dowd LLP and Entwistle & Cappucci LLP have filed a class action lawsuit seeking to represent purchasers of Silicon Motion Technology Corporation (NASDAQ: SIMO) American Depositary Shares (“ADSs”) between June 6, 2023 and July 26, 2023, inclusive (the “Class Period”).  Captioned Water Island Event-Driven Fund v. MaxLinear, Inc., No. 23-cv-01607 (S.D. Cal.), the Silicon Motion class action lawsuit charges MaxLinear and certain of its top executives with violations of the Securities Exchange Act of 1934. 

If you suffered substantial losses and wish to serve as lead plaintiff, please provide your information in the form on this page.  You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at jsanchez@rgrdlaw.com.  Lead plaintiff motions for the Silicon Motion class action lawsuit must be filed with the court no later than October 31, 2023.

CASE ALLEGATIONS: The action is based upon the defendants’ allegedly false and misleading statements and omissions of material facts concerning MaxLinear’s ability to timely close a business combination with Silicon Motion – a combination that was ultimately abandoned (the “Merger”).  Specifically, the complaint alleges that defendants failed to disclose that: (i) MaxLinear had decided it would not consummate the Merger because the economic circumstances surrounding the Merger had materially changed, including a material downturn in the semiconductor industry and rising interest rates; (ii) MaxLinear had determined to unilaterally terminate the Merger in the event the Merger was approved by China’s State Administration for Market Regulation (“SAMR”); (iii) MaxLinear intended to argue that certain conditions in Article 6 of the Merger Agreement had not been satisfied as required by May 5, 2023 (i.e., before the class period) as a basis to terminate the Merger; and (iv) as a result, defendants had materially misrepresented the viability of the Merger, the purported benefits of the Merger, and the likelihood that the Merger would be consummated.

On July 26, 2023, regulatory approval for the Merger was granted by China’s SAMR.  The price of Silicon Motion ADSs nearly doubled from the prior day’s close of $52.20 per ADS to an intraday high of $95.33 per ADS on July 26, 2023.  Near the close of trading on July 26, 2023, however, MaxLinear shocked the market by announcing in a press release, as described in a Form 8-K filed with the U.S. Securities and Exchange Commission that day, that MaxLinear was unilaterally terminating the Merger.

Prior to the market’s open on July 27, 2023, Silicon Motion issued a press release repudiating MaxLinear’s purported reasons for the termination.  In response to the news, between the market open on July 26, 2023 and the market close on July 27, 2023, the price of Silicon Motion ADSs declined from $94.20 per ADS to $52.51 per ADS, representing a decline of $41.69 per ADS (or 44%).

On August 7, 2023, Silicon Motion issued another press release in which it categorically rejected MaxLinear’s purported termination of the Merger Agreement, and the assertions made by MaxLinear in its notice letter of July 26, 2023.  Silicon Motion further stated that it would vigorously pursue its remedies and reserved all its rights under the Merger Agreement and otherwise, including, but not limited to, the right to hold MaxLinear liable for substantial damages.  In response to this news, the price of Silicon Motion ADSs closed down $3.57 per ADS on August 16, 2023, or more than 6%, from the prior day’s close of $58.01 on higher than average volume.

The plaintiff is represented by Robbins Geller and Entwistle & Cappucci, which have extensive experience in prosecuting investor class actions including actions involving financial fraud.  You can view a copy of the complaint by clicking here.

THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Silicon Motion ADSs during the Class Period to seek appointment as lead plaintiff of the Silicon Motion class action lawsuit.  A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class.  A lead plaintiff acts on behalf of all other class members in directing the Silicon Motion class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the Silicon Motion class action lawsuit.  An investor’s ability to share in any potential future recovery of the Silicon Motion class action lawsuit is not dependent upon serving as lead plaintiff.

ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: Robbins Geller Rudman & Dowd LLP is one of the world’s leading complex class action firms representing plaintiffs in securities fraud cases.  The Firm is ranked #1 on the most recent ISS Securities Class Action Services Top 50 Report for recovering more than $1.75 billion for investors in 2022 – the third year in a row Robbins Geller tops the list.  And in those three years alone, Robbins Geller recovered nearly $5.3 billion for investors, more than double the amount recovered by any other plaintiffs’ firm.  With 200 lawyers in 10 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig.

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