Alpha and Omega Semiconductor Limited

On February 5, 2020, post-market, Alpha and Omega issued a press release announcing its financial results for the second fiscal quarter of 2020. Therein, the Company disclosed that the U.S. Department of Justice “recently commenced an investigation into the Company’s compliance with export control regulations relating to certain business transactions with Huawei and its affiliates (‘Huawei’).” Moreover, “[i]n connection with this investigation, [the Department of Commerce] has requested the Company to suspend shipments of its products to Huawei.” Alpha and Omega stated that “financial performance in the March quarter will be negatively impacted by the Huawei shipment interruption and by additional professional fees incurred in connection with the investigation.” 

On this news, Alpha and Omega’s stock price fell $1.48 per share, or 12%, to close at $10.85 per share on February 6, 2020, on unusually heavy trading volume.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company’s export control practices were in violation of applicable laws and regulations; (2) that, as a result, the Company was vulnerable to regulatory scrutiny and liability; and (3) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.