NEW YORK--(BUSINESS WIRE)--Entwistle & Cappucci LLP (“Entwistle & Cappucci”) and Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) today announced that their ongoing investigation has led to the filing of a class action complaint against MaxLinear, Inc. (“MaxLinear”) and certain of its senior executives on behalf of all persons or entities that purchased American Depository Shares (“ADSs”) of Silicon Motion Technology Corporation (NASDAQ: SIMO) (“Silicon Motion”) from June 6, 2023 through July 26, 2023, inclusive (the “Class”). The case was filed in the United States District Court for the Southern District of California and is captioned: Water Island Event-Driven Fund v. MaxLinear, Inc., No. 23-cv-01607 (S.D. Cal.).
The action is based upon the defendants’ allegedly false and misleading statements and omissions of material facts concerning MaxLinear’s ability to timely close a business combination with Silicon Motion – a combination that was ultimately abandoned (the “Merger”). Specifically, the complaint alleges that defendants 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 State Administration for Market Regulation (“SAMR”); (iii) MaxLinear intended to argue that certain conditions in Article 6 of the Agreement and Plan of Merger (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.
On July 26, 2023, regulatory approval for the Merger was granted by China’s SAMR. The price of Silicon Motion ADSs nearly doubled from the prior day’s close of $52.20 per ADS to an intraday high of $95.33 per ADS on July 26, 2023. Near the close of trading on July 26, 2023, however, MaxLinear shocked the market by announcing in a press release, as described in a Form 8-K filed with the U.S. Securities and Exchange Commission that day, that MaxLinear was unilaterally terminating the Merger.
Prior to the market’s open on July 27, 2023, Silicon Motion issued a press release repudiating MaxLinear’s purported reasons for the termination. In response to the news, between the market open on July 26, 2023 and the market close on July 27, 2023, the price of Silicon Motion ADSs declined from $94.20 per ADS to $52.51 per ADS, representing a decline of $41.69 per ADS (or 44%).
On August 7, 2023, Silicon Motion issued another press release in which it categorically rejected MaxLinear’s purported termination of the Merger Agreement, and the assertions made by MaxLinear in its notice of July 26, 2023. Silicon Motion further stated that it would vigorously pursue its remedies and reserved all of its rights under the Merger Agreement and otherwise, including, but not limited to, the right to hold MaxLinear liable for substantial damages. In response to this news, the price of Silicon Motion ADSs closed down $3.57 per ADS on August 16, 2023, or more than 6%, from the prior day’s close of $58.01, on higher than average volume.
The complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. A copy of the complaint may be found on Entwistle & Cappucci’s and Robbins Geller’s respective websites below.
If you wish to serve as a lead plaintiff in this matter, you must file a motion with the Court no later than October 31, 2023. Any member of the proposed Class may move the Court to serve as a lead plaintiff through counsel of their choice, or they may choose to do nothing and remain a member of the Class.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact: Robert N. Cappucci, Esq. of Entwistle & Cappucci at (212) 894-7200 or via e-mail at email@example.com, or J.C. Sanchez, Esq. of Robbins Geller at (619) 231-1058 or via email at firstname.lastname@example.org.
About Entwistle & Cappucci
Entwistle & Cappucci is a national law firm providing exceptional legal representation to clients in the most complex and challenging legal matters. Our practice encompasses all areas of litigation, corporate transactions, bankruptcy, insurance, corporate investigations and white-collar defense. Our clients include public and private corporations, major hedge funds, public pension funds, governmental entities, leading institutional investors, domestic and foreign financial services companies, emerging business enterprises and individual entrepreneurs.
About Robbins Geller
Robbins Geller is one of the world’s leading complex class action firms representing plaintiffs in securities fraud cases. The Firm is ranked #1 on the most recent ISS Securities Class Action Services Top 50 Report for recovering more than $1.75 billion for investors in 2022 – the third year in a row Robbins Geller tops the list. And in those three years alone, Robbins Geller recovered nearly $5.3 billion for investors, more than double the amount recovered by any other plaintiffs’ firm. With 200 lawyers in 9 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig.
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