According to the law firm press release, Diodes, together with its subsidiaries, designs, manufactures and supplies application specific standard products in the discrete, logic and analog semiconductor markets primarily in Asia, North America and Europe.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s financial performance and future prospects. Specifically, it alleges that defendants misrepresented and/or failed to disclose the following adverse facts: (a) that the Company’s labor problems associated with its backend facility in China were much more severe and prolonged than publicly represented; (b) that the Company’s gross margins were being impacted by higher than expected wages and labor shortages; (c) that the Company was experiencing decreasing demand for its products, especially from its LED TV and notebook customers; and (d) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company and its prospects.
On June 9, 2011, Diodes updated its financial guidance for the second quarter of 2011. For the second quarter, the Company maintained its revenue guidance of $170 to $178 million, but lowered its gross margin guidance to 32.5% plus or minus 1.5% as compared to its previous guidance of 36.5% plus or minus 1%. Defendants explained that the Company’s gross margin was “being impacted by a mix shift due to a softening of demand and the slower than expected recovery from the previously disclosed manpower shortages at the Company’s packaging facilities.” In reaction to the announcement, the price of Diodes stock fell $4.38 per share over the next two trading days, or just over 16%, to close at $22.98 per share, on heavy trading volume.
On August 9, 2011, Diodes announced its financial results for the second quarter of 2011, the period ended June 30, 2011. For the quarter, the Company reported revenue of $169.8 million – below the Company’s guidance – and gross profit margin of 32.8% – at the low end of the Company’s guidance.
On June 14, 2013, the Court granted the plaintiff's Motion for Appointment as Lead Plaintiff and Approval of Selection of Counsel. Robbins Geller was appointed as lead counsel and Local 731 as lead plaintiff.
On August 1, 2013, the lead plaintiffs filed an Amended Complaint For Violation Of The Federal Securities Laws And Jury Demand against the defendants.