Silicon Motion Technology Corporation
Lead Plaintiff Deadline 10/30/2023
The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of California on behalf of those who acquired Silicon Motion Technology Corporation (“Silicon Motion” or the “Company”) (NASDAQ: SIMO) securities during the period from June 6, 2023 through July 26, 2023, inclusive (the “Class Period”). Investors have until October 30, 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
According to the complaint, on May 5, 2022, Defendant MaxLinear, Inc. (“MaxLinear”) announced that it had executed a merger agreement with Defendant Silicon Motion pursuant to which MaxLinear would acquire Silicon Motion, with Silicon Motion surviving the merger as a wholly-owned subsidiary of MaxLinear. Upon closing of the transaction, MaxLinear stockholders were expected to own approximately 86% of the combined company and former Silicon Motion security holders were expected to own approximately 14% of the combined company. Notwithstanding ongoing trade tensions between the U.S. and China, and a weakening semiconductor market, Defendants allegedly continued to promote the merger and its benefits to shareholders throughout the Class Period.
On July 26, 2023, China’s State Administration for Market Supervision (“SAMR”) granted regulatory approval for the merger. On the same day, however, MaxLinear surprisingly announced that it was unilaterally terminating the merger agreement with Silicon Motion. On this news, the price of Silicon Motion shares declined by $41.69 per share, or approximately 44%, from $94.20 per share at market open on July 26, 2023, to close at $52.51 on July 27, 2023.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose that: (i) MaxLinear had decided it would not consummate the merger because the economic circumstances surrounding the merger had materially changed, including a material downturn in the semiconductor industry and rising interest rates; (ii) MaxLinear had determined to unilaterally terminate the merger in the event the merger was approved by China’s SAMR; (iii) MaxLinear intended to argue that certain conditions in Article 6 of the merger agreement had not been satisfied as required by May 5, 2023 (i.e., before the class period) as a basis to terminate the merger; and (iv) as a result, Defendants had materially misrepresented the viability of the merger, the purported benefits of the merger, and the likelihood that the merger would be consummated.
According to the complaint, on May 5, 2022, Defendant MaxLinear, Inc. (“MaxLinear”) announced that it had executed a merger agreement with Defendant Silicon Motion pursuant to which MaxLinear would acquire Silicon Motion, with Silicon Motion surviving the merger as a wholly-owned subsidiary of MaxLinear. Upon closing of the transaction, MaxLinear stockholders were expected to own approximately 86% of the combined company and former Silicon Motion security holders were expected to own approximately 14% of the combined company. Notwithstanding ongoing trade tensions between the U.S. and China, and a weakening semiconductor market, Defendants allegedly continued to promote the merger and its benefits to shareholders throughout the Class Period.
On July 26, 2023, China’s State Administration for Market Supervision (“SAMR”) granted regulatory approval for the merger. On the same day, however, MaxLinear surprisingly announced that it was unilaterally terminating the merger agreement with Silicon Motion. On this news, the price of Silicon Motion shares declined by $41.69 per share, or approximately 44%, from $94.20 per share at market open on July 26, 2023, to close at $52.51 on July 27, 2023.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose that: (i) MaxLinear had decided it would not consummate the merger because the economic circumstances surrounding the merger had materially changed, including a material downturn in the semiconductor industry and rising interest rates; (ii) MaxLinear had determined to unilaterally terminate the merger in the event the merger was approved by China’s SAMR; (iii) MaxLinear intended to argue that certain conditions in Article 6 of the merger agreement had not been satisfied as required by May 5, 2023 (i.e., before the class period) as a basis to terminate the merger; and (iv) as a result, Defendants had materially misrepresented the viability of the merger, the purported benefits of the merger, and the likelihood that the merger would be consummated.