Mobileye Global, an Israel-based company that manufactures ADAS systems and autonomous driving software, is facing a class action lawsuit filed by a shareholder after Mobileye’s stock price fell following news that many of its automaker customers had an excess of microchips, and thus would not be buying as many as forecasted in 2024.
The lawsuit was filed on behalf of all investors who purchased stock in Mobileye between Jan. 26, 2023, and Jan. 3, 2024.
Mobileye on Jan. 4 announced its Tier 1 customers, which include auto giants like Volkswagen and Porsche, had aggressively stockpiled chip inventories to circumvent the shortages experienced in the past two years. However, with supply chain concerns easing, these customers are now using their accumulated excess inventory, leading to a reduced demand for new chip orders.
Mobileye said the excess inventory included an estimated 6 million to 7 million units of EyeQ SoCs---a hardware and software solution for ADAS and self-driving systems---held by customers.
The company said “the lower-than-expected volumes in the EyeQ SoC business” led it to forecast its revenue in the first quarter of 2024 would fall to 50% of the $458 million it generated in the same period in 2023. On this news, Mobileye’s stock price fell $9.75 per share, or 24.5%, to close at $29.97 per share on Jan. 4.
The plaintiff who filed the lawsuit alleges Mobileye failed to tell investors its Tier 1 customers had bought excess inventory in 2023 and still had much of it on hand, leading to a significant risk the company would sell less product in 2024.
Other shareholders may be eligible to participate in the class action against Mobileye Global Inc. Robbins LLP is preparing the suit and asks anyone interested in acting as a lead plaintiff to contact the firm by March 18 by emailing Aaron Dumas Jr. or calling 800-350-6003.
Shareholders do not have to participate in the case to be eligible for a recovery, and can remain an absent class member.
