The lawsuit claims that AMD bosses, including Rory Read and Lisa Su, made "false and misleading statements to investors about the manufacturing and subsequent launch of, as well as the demand for, its Llano microprocessor" back in 2011 and 2012. Their case claims that AMD and its management violated the Securities Exchange Act.
The court has ruled that anyone who bought AMD stock between April 4, 2011 and October 18, 2012 is covered by the lawsuit.
In 2011 Llano looked promising. Although its CPU cores were not great on the performance scores, the chip had the Radeon IGP which made it great as an integrated system which put Intel to shame.
But the shareholders claim that AMD artificially inflated the company's share price by making false statements about Llano, which it had touted as "the most impressive processor in history".
Originally set for product launch in the fourth quarter of 2010, sales of the Llano were delayed because of problems at the company's chip manufacturing plant, the lawsuit said.
The lawsuit said AMD’s then-Chief Financial Officer Thomas Seifert told analysts on an April 2011 conference call that problems with chip production for the Llano were in the past, and that the company would have ample product for a launch in the second quarter.
AMD continued to state that there were no problems with supply, concealing the fact that it was only shipping Llanos to top-tier computer manufacturers because of supply constraints, the lawsuit said.
By the time Advanced Micro was ready to ramp up shipments in late 2011, no one was interested and this resulted in an inventory glut. AMD eventually disclosed in October 2012 that it was writing down $100 million of Llano inventory as not saleable, the lawsuit said.