SAN DIEGO, Dec. 20, 2023 (GLOBE NEWSWIRE) -- Robbins LLP reminds investors that a shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired ON Semiconductor Corporation (NASDAQ: ON) common stock between May 1, 2023 and October 27, 2023. Onsemi manufactures and sells semiconductor components for various electronic devices worldwide, including power and sensing solutions, and technologies for the electrification of the automotive industry.
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What is this Case About: ON Semiconductor Corporation (ON) Misrepresented Demand for its Products and Revenue Growth
According to the complaint, this case arises from defendants’ repeated misrepresentations to investors regarding the “stability” and “visibility” of the demand for onsemi's SiC and other products, and the sustainability of onsemi’s revenue growth, by overstating the impact of the Company’s long-term supply agreements (“LTSAs”) on the achievability of its revenue streams.
Plaintiff alleges that during the class period, defendants misrepresented 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 began to learn 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 onsemi announced its third quarter 2023 financial results. During the investor earnings call held that day, defendant El-Khoury disclosed to investors that the Company was “taking a very cautious approach” with its SiC products due to signs of a weakening demand in the Company’s automotive business segment (which generates between 75% and 90% of the Company’s SiC revenues), while also revealing that the Company would miss its $1 billion 2023 SiC revenue target by approximately $200 million. Defendant El-Khoury claimed that the approximately 20% reduction in the Company’s expected SiC revenue was solely attributable to one customer (identified by many analysts as Tesla, Inc.). Defendant Trent added, however, that the Company expects “greater sequential declines in industrial and other end markets” as well. On this news, the price of omsemi common stock plummeted $18.18 per share, or nearly 22%, from a close of $83.52 per share on October 27, 2023, to close at $65.34 per share on October 30, 2023.
What Now: Similarly situated shareholders may be eligible to participate in the class action against ON Semiconductor Corporation. Shareholders who want to act as lead plaintiff for the class should contact Robbins LLP. Plaintiffs must file their lead plaintiff papers by February 12, 2024. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
About Robbins LLP: Some law firms issuing releases about this matter do not actually litigate securities class actions; Robbins LLP does. A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. Since our inception, we have obtained over $1 billion for shareholders.
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