EndoChoice Holdings, Inc.
Robbins Arroyo LLP: EndoChoice Holdings, Inc. (GI) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against EndoChoice Holdings, Inc. (NYSE: GI) in the Superior Court of the State of Georgia, County of Fulton. The complaint is brought on behalf of all purchasers of EndoChoice securities pursuant to the company’s June 5, 2015 initial public offering (“IPO”) for alleged violations of the Securities Act of 1933 by EndoChoice’s officers and directors. EndoChoice, a medical device company, designs and commercializes various products for gastrointestinal (GI) caregivers in the United States and internationally. Its principal product is known as Fuse, a full spectrum endoscopy system.
EndoChoice Accused of Lying About Its Principal Product
According to the complaint, on June 5, 2015, EndoChoice held its IPO, selling 6,350,000 shares of common stock at $15.00 per share. The Registration Statement the company filed with the U.S. Securities and Exchange Commission emphasized the growth of the GI endoscopy market and EndoChoice’s advantageous position within the market. The Registration Statement went on to tout the capabilities of the Fuse system, stating that the improved clinical and cost outcomes that Fuse enables will lead to its widespread adoption over time. Notably, EndoChoice officials were required to disclose events or uncertainties that have had or are reasonably likely to cause the company’s financial information not to be indicative of future operating results. The complaint alleges that EndoChoice officials issued false statements in the Registration Statement by failing to disclose that the adoption of Fuse had entered into a serious decline.
The truth about the company’s problems did not emerge until November 5, 2015, when EndoChoice announced that its Fuse placements dropped to just 21 in the third quarter compared to 26-27 per quarter in the first half of the year. The next day, J.P. Morgan analysts lowered their price target from $26 to $19 and stated that “a shortfall so soon after the company’s June IPO is certainly concerning and raises questions about the trajectory of Fuse adoption going forward.” On January 8, 2016, the company announced that deals were taking longer than anticipated to close, and J.P. Morgan analysts characterized the company’s Fuse adoption as disappointing. Since its IPO, EndoChoice stock has fallen over 74% to close at $3.87 per share on August 8, 2016.
EndoChoice Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.