Applied Optoelectronics, Inc. (AAOI) Accused of Downplaying Loss of Market Share
According to the class action complaint, Applied Optoelectronics, Inc. (AAOI) represented that it had a competitive advantage over other transceiver manufacturers, allowing it to better fulfill customers’ increasing demands and easily transition to faster transceivers. Amazon, Applied Optoelectronics’ biggest customer, represented 35.4% of the company’s revenue in 2017. On October 12, 2017, the company disclosed that Amazon had lowered its demand for 100G and 40G transceivers and its revenue from Amazon fell to 10% of its total revenue. Applied Optoelectronics’ situation did not improve; on February 21, 2018, it announced that it had fallen behind in its transition from 40G to 100G, citing “customer-specific” issues. Since news of the company’s troubles became public, its stock price fell over 53% to close at $27.51 on February 22, 2018.