Insider Selling/Undisclosed Related Party Transactions
Product or Service
This is a securities fraud class action lawsuit against SiRF Technology Holdings, Inc. and certain of its officers and directors charging them with violations of the Securities Exchange Act of 1934.
SiRF, through its subsidiaries, engages in the development and marketing of semiconductor and software products that are designed to enable location-awareness utilizing global positioning system and other location technologies worldwide.
The class action lawsuit alleges that during the Class Period, SIRF issued materially false and misleading statements regarding SiRF's business and prospects. As a result of defendants' false statements, SiRF stock traded at artificially inflated prices during the Class Period, permitting one of the defendants to sell $9.6 million worth of his SiRF stock at $24.18-$24.29 per share.
On February 4, 2008, after the market closed, SiRF announced disappointing financial results for its fourth quarter and fiscal 2007. On February 5, 2008, SiRF's stock collapsed $8.91 per share to close at $7.36 per share, a one-day decline of 54%.
According to the class action complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows:
(a) SiRF's acquisition of Centrality Communications, Inc. was having an adverse impact on SiRF's results due to the similar products sold by Centrality which were cannibalizing SiRF's sales;
(b) SiRF' s major customers were not placing orders at sufficient quantities for SiRF to meet the aggressive targets set by and for SiRF;
(c) Centrality's System-on-Chip ("SoC") product line had lower gross margins than SiRF's products and SIRF knew that although the Centrality acquisition would increase revenues in the fourth quarter (as it did), it would also significantly lower SiRF's gross margins (as it also did);
(d) competitive pressures were having much more of an adverse impact on SiRF than acknowledged by defendants, as SiRF's customers were moving to cellular-enabled products which SiRF could not adequately compete with;
(e) as of October 30, 2007, one month into the fourth quarter, fourth quarter gross margins would be down significantly because of the lower SoC product line margins; and
(f) downward pricing pressures were accelerating and would lead to lower margins and earnings in future quarters.
Name (Stock Symbol)
SiRF Technology Holdings, Inc. (SIRF)
SiRF Technology Holdings, Inc. supplies GPS semiconductor and software solutions.
The information provided on ClassAdvocate.com is general in nature,
does not apply to any particular factual situation, and is not and
should not be taken as legal or other professional advice. We make no
commitment or warranty that the factual, legal or any other information
on ClassAdvocate.com, or on any linked website, is accurate, complete,
error-free, or current. As such, you should not rely on such information,
and should seek professional advice if and as you determine appropriate.
ClassAdvocate.com is not a lawyer referral service, and no attorney-client
or confidential relationship is or should be formed by use of the site.
The investigations listed on ClassAdvocate.com are attorney advertisements
and do not in any way constitute a referral or endorsement by ClassAdvocate.com
or any approved or authorized lawyer referral service.