AMD is being taken to court over weak Llano sales

Posted Jan 18, 2014

AMD is being taken to court by some of their investors alleging that AMD knowingly misled them into believing that the Llano APU would perform well. The lawsuit was filed in California by investors that bought stock in AMD between October 27, 2011 and October 18, 2012, according to Tom?s Hardware.

The lawsuit alleges that AMD misrepresented Llano at the time of the launch and claimed that the chips were going to do well in emerging markets. AMD said that demand for Llano products in April 2012 was higher than expected. But three months later, AMD revealed that demand for Llano desktop chips were weak.

AMD reported lower than expected revenues and the price of AMD stock dropped almost 25% on the news. Investors claimed that AMD dismissed concerns about their high inventory levels. AMD had to take down a $100 million inventory write-down for unsold Llano chips. The stock dropped another 17% following that news. The plaintiffs in the case will need to prove that AMD knowingly violated the Securities Exchange Act.