Legal vultures swoop on Compellent
Claim management misled the markets
Compellent is being investigated by a law firm about potentially false and misleading statements that violated US federal securities laws.
Compellent announced record third quarter 2009 results on October 28, 2009, sending its shares from nearly $18 per share to over $24 in January 2010. But on February 11 2010 it announced its Q1 2010 revenue guidance and shares dropped from $21.77 per share to $16.44 a day later. Then on April 07 2010 Compellent lowered its Q1 2010 revenue guidance. Shares dropped after the news from $17.50 to $13.20 the next day.
Today they are trading at $12.14, having almost halved in value.
The law firm Holzer Holzer & Fistel, LLC, is investigating potential violations of the federal securities laws by Compellent. Its investigation focuses on whether a series of statements regarding Compellent’s business, prospects and operations were materially false and misleading at the time they were made. Bring on the eDiscovery software.
Investors are separately being encouraged to contact the Shareholders Foundation, an investor advocacy group which researches shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal matters. It too claims to have detected a whiff of possible materially false and misleading statements by Compellent management.
The Shareholders Foundation is comprised of a network of legal experts who represent the shareholders in real cases.
STEC is another storage firm with strong investor dissatisfaction and is facing class action law suits of its own. These suits claim its management made false and misleading statements about business prospects when competing solid state drive (SSD) suppliers were making inroads into its customers, and that the largest customer, EMC, had over-ordered STEC product leading to revenue falls. ®