Robbins Arroyo LLP: Ooma, Inc. (OOMA) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed in the Superior Court of the State of California, County of San Mateo. The complaint alleges that officers and directors of Ooma, Inc. (NYSE: OOMA) violated the Securities Act of 1933 by filing a misleading Registration Statement and Prospectus in connection with the company’s initial public stock offering (“IPO”) on July 17, 2015. Ooma provides communications solutions and other connected services to small business, and home and mobile users in the United States and Canadian markets.
Ooma Accused of Filing Misleading Registration Statement
According to the complaint, Ooma failed to disclose in its Registration Statement that certain exceptionally large prior fiscal year sales to its largest outside reseller were not recurring or being replaced in the fiscal year leading into the IPO. Further, the Registration Statement did not reveal that the company’s customer churn rate, or rate of customer terminations or failures to renew, had increased significantly as of the IPO as a result of customers having endured eight-hour service outages in April and May 2015. The Registration Statement also did not mention that technological difficulties in the company’s lead generation business were causing leads to get lost in the internet before reaching their intended targets, thus negatively impacting the company’s business. The complaint alleges that these problems caused the company’s subscription retention rate to plummet and net losses to double on a year-over-year basis, as of the IPO. The adverse events and uncertainties associated with these negative trends were likely to have a material impact on Ooma’s profitability and were required to be disclosed in the Registration Statement, but were not.
On July 17, 2015, utilizing the false and misleading Registration Statement, Ooma successfully raised $65 million in its IPO, collectively selling five million shares of Ooma common stock at $13 per share. However, Ooma’s stock now trades at approximately half the IPO price, and closed at $6.49 per share on January 15, 2016.
Ooma 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.