Monolithic Power systems misled investors about product issues, faces lawsuit

In the United States, Berger Montague PC announced that a securities class action lawsuit has been filed against Monolithic Power Systems, Inc. The lawsuit pertains to activities during a Class Period from February 8, 2024, to November 8, 2024, alleging the company misled investors about significant quality control issues affecting its power management components. Investors argue these issues notably impacted Nvidia Corporation, Monolithic Power's largest customer, which led to significant financial losses as the company's stock dropped sharply during and after the Class Period due to negative reports on performance and cancelled orders. On October 30, 2024, Monolithic Power revealed a revenue decline in its Enterprise Data business, missing estimates by a considerable margin and raising concerns among investors. Following the report, share prices fell dramatically, losing more than 17% in just one day. Analysts pointed to severe performance and quality control defects in the company’s voltage regulator modules and integrated circuits, raising fears about the overall impact on Nvidia's products that relied on these components. The decrease in company performance further fueled investor anxiety and impacted Monolithic Power’s reputation in the market. The situation escalated on November 11, 2024, when Edgewater Research released a report stating that Nvidia had halted half of its orders with Monolithic Power. The report highlighted that Nvidia planned to eliminate Monolithic Power products from its upcoming Blackwell chips due to persistent performance issues. This triggered another severe decline in Monolithic Power’s stock price, showcasing the loss of confidence Nvidia had in the company, and resulted in a staggering 15% drop in the share price over one weekend. With a deadline for investors set for April 7, 2025, those who acquired Monolithic Power securities during the Class Period are urged to seek appointment as lead plaintiff representatives in the ongoing litigation. The case highlights the significant financial implications for investors arising from misrepresented product integrity and its damaging effects on business relationships, specifically with industry leaders like Nvidia. Berger Montague aims to uphold the interests of investors and restore confidence in the market through this class action suit.