Class action lawsuit filed against AMD over ‘Llano’ APU sales

Class action lawsuit filed against AMD over ‘Llano’ APU salesSubmitted by Avinash Tripathi on Sat, 01/18/2014 - 12:22 

On Wednesday, a class action lawsuit was filed against AMD in the US District Court for the Northern District of California.  The lawsuit was filed by Robbins Geller Rudman & Dowd LLP, on behalf of the buyers of AMD common stock between October 27, 2011, and October 18, 2012 - that is, the `class period.'
In the class action complaint, AMD has been accused of violating the Securities Exchange Act of 1934 over its `Llano' APU.
The complaint alleges that the investors were misled by AMD - through statements issued by the company - into believing that the 32 nm `Llano' first-generation APU had better chances of sales on the market than it actually did.
According to the complaint, AMD's false and misleading statements hinted at the "strong position" of the company's desktop business.  The company had, in its statements issued till around April 2012, asserted that the Llano APU was witnessing a "higher than anticipated" demand, especially in the "emerging markets."

However, in actuality, the APU's demand in - particularly in AMD's Chinese and European markets - was much weaker than what the company was suggesting in its statements.
The lawsuit also accuses the AMD executives of "deceptively" dismissing the perception that the company's future gross margins would be "adversely affected by the large amount of unsold Llano inventory, when such inventory was unsalable, even at heavily discounted prices."