On March 11, 2013 after the market closed, MagnaChip Semiconductor Corporation (“MagnaChip” or the “Company”) (NYSE: MX) disclosed in a filing with the Securities and Exchange Commission (SEC) that as a result of incorrectly recognizing revenue, the Company will be restating its financial statements for each of the fiscal quarters and years in 2011 and 2012 and the first three quarters in 2013. The Company’s SEC filing states, in pertinent part, as follows:
“On March 6, 2014, the Audit Committee of the Company’s Board of Directors determined that the Company incorrectly recognized revenue on certain transactions and as a result will restate its financial statements. This conclusion is based upon preliminary findings of an ongoing internal review into practices and procedures by management, conducted at the Audit Committee’s request by outside professional advisors and after consultation with management and the Company’s independent auditors. Revenue on these transactions was recognized when products were shipped to a distributor but should have been recognized when the distributor shipped the product to the customer. As a result, revenue on these transactions will be reversed and recognized in the period when the products were shipped by the distributor.”
Additionally, the Company disclosed that MagnaChip’s management has concluded that one or more material weaknesses exist in the Company’s internal controls over financial reporting and that, as a result, internal controls over financial reporting and disclosure controls and procedures were not effective.
Following this news, MagnaChip’s shares declined by $2.14 per share, or 15% in after-market hours trading to a price of $12.19 per share on March 11, 2014.
The Wites Law Firm seeks to uncover additional information about this substantial loss of shareholder value, and potential investor claims against MagnaChip Semiconductor Corporation.
If you are an investor who purchased MagnaChip stock you may have a legal claim against the Company and could serve as the lead plaintiff in a class action lawsuit. If you are interested in being the lead plaintiff, or would like to speak with an attorney about your legal rights, contact the attorneys at Wites Law Firm by email at info@witeslaw.com or toll-free at 1 (866) 277-8631.
