AMCC Faces Shareholder Suit
The complaint charges AMCC and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants disseminated false and misleading statements concerning the Company's operations and prospects for Q4 2001 and beyond, including that:
-- Applied Micro Circuits was on track to achieve 16% to 20%
sequential growth for Q4 2001. -- Applied Micro Circuits had $133 million in backlog which was equal to 77% of its forecast for its March quarter.
-- The increase in its Q3 DSOs (days sales outstanding) was not attributable to the financial problems many of Applied Micro Circuits' customers were having but rather due to the MMC acquisition and back-end loading due to foundry issues.
-- The Company's $133 million of backlog was solid.
-- MMC, AMCC's new subsidiary, had not been notified of any material order push-outs or cancellations.
-- AMCC's demand was so strong that its only real restraint on its future financial prospects was its ability to have enough supply.
-- The Company would conservatively report Q4 EPS of $0.17 and fiscal 2001 EPS of $0.57.
-- The Company would post growth of 16%-20% compared to the 13% analysts had previously forecast, in spite of all the recent concerns regarding carrier Capex spending and telecom equipment slowdowns.
Taking advantage of the inflation in AMCC's stock caused by their statements, the AMCC insiders sold almost $100 million worth of their own AMCC stock at artificially inflated prices of as much as $87 per share.
On Feb. 5, 2001, after the close of the market, the truth concerning AMCC's operations and the sudden filings by AMCC's officers to sell their personal holdings in AMCC came under fire from analysts as they questioned AMCC about its claimed unique position in the optical space. Defendants were forced to disclose that in fact AMCC was experiencing large order cancellations and push-outs with its OC-12, OC-48 and OC-192 products. This news sent AMCC's shares plummeting from $70 where they had traded days before when defendants were selling their own shares to as low as $53 on Feb. 6, 2001.
Plaintiff seeks to recover damages on behalf of all purchasers of AMCC publicly traded securities during the Class Period (the ``Class''). The plaintiff is represented by Milberg Weiss Bershad Hynes & Lerach LLP, who has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.