Shareholder rights attorneys at Robbins Arroyo LLP announce that a shareholder of SemiLEDs Corporation (NASDAQ: LEDS) has filed a complaint in the U.S. District Court for the Southern District of New York. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between December 9, 2010 and July 12, 2011 (the "Class Period").
SemiLEDs Accused of Making False and Misleading Statements
According to the complaint, SemiLEDs made false and/or misleading statements, as well as failed to disclose material adverse facts about the company's business, operations, and financial performance throughout the Class Period. Specifically, the complaint alleges that SemiLEDs failed to disclose that prices for its products were experiencing extreme pricing pressure from its customers, significantly reducing the average selling price of its products. The complaint further alleges that SemiLEDs released financial statements that were not indicative of future operating results because the company failed to disclose known events and uncertainties, including a decline in product demand, the likely loss of a significant customer, and the decline in the value of its inventory. As a result of these false and misleading statements and omissions, SemiLEDs shares traded at artificially inflated prices during the Class Period, reaching a high of $32.12 per share on December 21, 2010.
SemiLEDs Stock Price Drops on News of Poor Financial Results and an Inventory Charge
According to the complaint, on July 10, 2011, SemiLEDs announced disappointing results for the third quarter 2011. For the quarter, SemiLEDs reported a net loss of $5.1 million and decrease in revenue of 43% compared to the same quarter in 2010. In addition, SemiLEDs reported that its results were adversely affected by a $1.1 million inventory charge during the quarter, an amount equal to 7% of the value of the company's total inventory on February 28, 2011. On this news, SemiLEDs' stock price dropped more than 10%, or $0.71, to close at $5.87 per share on July 12, 2011. The $5.87 per share closing price represents a decline of 77% compared to the $25.76 per share price reached on the company's first day of trading, December 9, 2010.
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested. For more information, please go to http://www.robbinsarroyo.com.