ON SEMICONDUCTOR INVESTOR DEADLINE APPROACHING
- None.
- The complaint alleges that the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose important information.
Insights
The legal implications of the allegations against ON Semiconductor are significant. The assertion that the company and its executives may have violated federal securities laws by providing misleading statements and failing to disclose pertinent information could have serious consequences. If these allegations are proven, it could result in substantial penalties and undermine investor confidence. The role of long-term supply agreements (LTSAs) is particularly concerning, as they are typically used to provide stability and predictability in earnings. The accusation that ON Semiconductor could abrogate these LTSAs upon customer request, contrary to the company's statements, suggests a potential misrepresentation of the stability of their revenue streams.
Investors rely on the accuracy and transparency of information to make informed decisions and any misrepresentation can lead to significant financial losses. The legal process will seek to determine whether the executives knowingly engaged in deceptive practices or if there were failures in internal controls to prevent such disclosures. This case highlights the importance of rigorous compliance with securities law and the need for robust internal mechanisms to ensure accurate financial reporting.
From a financial perspective, the allegations against ON Semiconductor could have a substantial impact on the company's stock performance. The revelation of potential securities law violations typically triggers a negative market reaction, as it undermines trust and may lead to legal costs, penalties and reputational damage. Investors who suffered losses will be particularly attentive to the outcome of the investigation, as it could lead to compensation through the class action lawsuit.
The focus on LTSAs is key, as they are often factored into valuations and future earnings projections. If ON Semiconductor's LTSAs are not as 'locked in' as previously thought, this could necessitate a re-evaluation of the company's financial health and growth prospects. The uncertainty surrounding the company's revenue predictability may also lead to increased stock volatility as the market reassesses the risk profile associated with ON Semiconductor. In the long-term, the company may need to rebuild its credibility with investors, which could involve changes in corporate governance and reporting practices.
The situation with ON Semiconductor is a stark reminder of the importance of transparency and reliability in corporate communications, especially in the technology sector where LTSAs are common. These agreements are often highlighted by semiconductor companies to showcase guaranteed future revenue and any deviation from this can disrupt market perceptions. The broader implications for the semiconductor industry could include increased scrutiny of LTSAs and a push for more stringent disclosure practices.
As market analysts, we must consider the potential ripple effects across the industry, as trust in LTSAs and corporate disclosures are fundamental to investment decisions. A shift in investor sentiment could lead to a more cautious approach to investing in companies with significant reliance on LTSAs. This case could set a precedent, prompting other companies to review their disclosure policies to avoid similar legal challenges and investor backlash.
Securities Litigation Partner James (Josh) Wilson Encourages Investors Who Suffered Losses Exceeding
If you suffered losses exceeding
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As detailed below, the complaint alleges that the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (1) revenues from billions of dollars in reported LTSAs were "committed" and "locked in," and were effectively certain to be obtained by the Company when, in fact, the Company could and would abrogate the LTSAs at a customer's request; (2) LTSAs provided "predictable" and "sustainable" performance to drive the Company's growth, even in tough macroeconomic conditions, when, in fact, they would be modified or eliminated as conditions changed; and (3) Defendants had "good visibility" into customer demand when, in fact, demand could be reduced on short notice, even where LTSAs were in effect.
On October 30, 2023, investors learned the truth about the purported benefits of the Company's LTSA strategy and the achievability of projected revenue from the Company's products subject to LTSAs, when ON Semiconductor announced its third quarter 2023 financial results. During the accompanying investor earnings call held that same day, Defendant El-Khoury, in his opening remarks, revealed that ON Semiconductor would miss its
On this news, the price of ON Semiconductor common stock plummeted
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding onsemi's conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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FAQ
How can investors who suffered losses exceeding $100,000 in ON Semiconductor stock or options between May 1, 2023, and October 27, 2023 discuss their options?
What is the deadline to seek the role of lead plaintiff in a federal securities class action against ON Semiconductor Corporation?
What is the complaint alleging against ON Semiconductor Corporation and its executives?
What did investors learn on October 30, 2023?
