A securities class action has been filed in the USDC — W.D.WA. against Monolithic Power Systems, Inc. (MPWR) (“Monolithic” or the “Company”), on behalf of all persons or entities who purchased or otherwise acquired Monolithic common stock between February 8, 2024, and November 8, 2024, both dates inclusive (the “Class Period”).
Monolithic is a provider of power management components that are used in broader electronic systems. Monolithic’s power management products function by converting voltages to the appropriate wattage required for use by an electronic system. Although Monolithic’s power control modules are used across a broad range of application settings, the products are most notably used in artificial intelligence (“AI”) data center applications. To sell its products, Monolithic claims it relies on a staff of technical sales and applications engineers who assist prospective customers with the design and use of the Company’s products and in the development of the customers’ own products. According to Monolithic, this process enables the Company to meet customers’ exacting specifications for quality and performance and promotes future product sales.
The Complaint alleges that the Defendants made materially false and/or misleading statements because they failed to disclose the following adverse facts pertaining to the Company’s business, operations, and financial condition, which were known to defendants or recklessly disregarded by them as follows:
(1) that Monolithic’s voltage regulator modules and power management integrated circuits were suffering from significant performance and quality control issues;
(2) that the defects listed in (1), above, had, in turn, negatively impacted the performance of certain products offered by Nvidia Corporation (“Nvidia”) in which such products were used;
(3) that Monolithic had failed to adequately address and resolve known issues affecting the performance of the power management solutions the Company supplied to Nvidia;
(4) that Monolithic’s relationship with Nvidia – the Company’s most important customer – had been irreparably damaged due to the significant performance and quality control problems affecting the products it supplied to Nvidia and the Company’s failure to adequately address such issues, as listed in (1)-(3), above; and
(5) that as a result of (1)-(4), above, Monolithic was acutely exposed to material undisclosed risks of significant business, financial, and reputational harm.
As a result of a report of Nvidia cancelling half of its outstanding Monolithic orders and intention to eliminate Monolithic’s allocation to most variants of its next-generation Blackwell chips due to “[p]erformance issues” with the Company’s products, the price of Monolithic common stock fell $114 per share from $761.30 per share on November 8, 2024 to $647.31 per share on November 11, 2024, a decline of 15% on above-average trading volume of more than 4 million shares traded.
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