Robbins Arroyo LLP: Gigamon Inc. (GIMO) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Gigamon Inc. (NYSE: GIMO) in the U.S. District Court for the Northern District of California. The complaint is brought on behalf of all purchasers of Gigamon securities between October 27, 2016 and January 17, 2017, for alleged violations of the Securities Exchange Act of 1934 by Gigamon’s officers and directors. Gigamon designs, develops, and sells products and services that provide customers with visibility and control of network traffic for enterprises and services providers in the United States, the rest of the Americas, Europe, the Middle East, Africa, and the Asia Pacific.
Gigamon Accused of Issuing Inaccurate Financial Guidance
According to the complaint, Gigamon submitted a series of filings with the U.S. Securities and Exchange Commission in which the company touted positive financial results and emphasized its strong leadership and momentum in the industry. Paul A. Hooper, Chief Executive Officer of Gigamon, stated, “Our business continues to accelerate with Q3 representing our third consecutive quarter of an increasing year-over-year revenue growth rate.” In a subsequent conference call with investors, Chief Financial Officer Michael J. Burns predicted an optimistic outlook for the company, stating that he expected fourth quarter revenue to be in the range of $91 to $93 million. However, the complaint alleges that Gigamon officials failed to disclose that: (1) Gigamon was experiencing reduced product bookings; (2) many of the company’s customers were deferring purchasing decisions; and (3) Gigamon failed to properly include these trends in its financial guidance.
On January 17, 2017, Gigamon issued a press release revealing disappointing fourth quarter 2016 financial results, including revenue of only $84 million to $85 million, much lower than the company’s previously reported guidance. Gigamon attributed the declining revenue to lower than expected product bookings in its North America West region, since several significant existing customer accounts deferred purchasing decisions into 2017. On this news, Gigamon’s stock fell $12.65 per share, or nearly 29%, to close at $31.40 per share on January 18, 2017.
Gigamon 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.