Re: "frivolous" lawsuits
I've read some of the press releases from the law firms (including those that have the exact same language and phrasing, which led me to contact one that indicated that, yes, it was working with the other), but not all of them. After all, there are only so many hours in a day.
If I were of counsel to AMD, I'd point out the following:
1) With no public guidance from the company (and, I believe, no private guidance, either), several analysts took it upon themselves to raise their estimates during late December and early January.
2) Intel reported its numbers, which led to many people inferring that AMD would report similarly strong numbers and resulted in additional estimate increases. At the same time, Intel indicated a willingness to become more aggressive to defend against additional market share loss.
3) AMD's 4Q reports was $0.03 below the now-inflated consensus, setting the stage for a share price drop. This price drop was exacerbated by the acknowledgement of production problems.
4) The plaintiffs' bar (or anyone else, for that matter) has no way of allocating the subsequent drop in AMD share price between the factors mentioned in 1-3.
5) The stock then came off again when AMD issued the press release regarding the possibility of a loss due to increased competition from Intel.
6) By the time the press release announcing the probability of a "significant" loss was issued, the shares had already lost 50% of their value from the $33 high. The reaction at that point was muted.
As a defense, AMD could offer that shareholders' losses from $33 were unfortunate, but the company had not guided people to the higher expectations that had led to the increase in price and that Intel's actions were not of AMD's doing. The portion of the shareholders' losses due to manufacturing problems at AMD were, apparently, quite small. The claim of a fix was unfortunate, since (as everyone on this thread is aware) semiconductor processing is sufficiently complex that a fix can often create problems of its own.
The biggest problem from these suits, IMO, would arise from the claim on management time and energy. Of course, the sheer number of lawyer press releases should not be construed as the potential number of actions, since they are all jockeying for lead position in a class action.
Class, as in a group, as opposed to class as a delineation of desirable social traits. - Tad LaFountain |
