Constant Contact, Inc.

Robbins Arroyo LLP: Constant Contact, Inc. (CTCT) Misled Shareholders According to a Recently Filed Class Action

Robbins Arroyo LLP announces that a securities fraud class action complaint was filed in the U.S. District Court for the District of Massachusetts. The complaint alleges that officers and directors of Constant Contact, Inc. (NASDAQGS: CTCT) violated federal securities laws between October 23, 2014 and July 23, 2015, by making misleading statements about Constant Contact’s business operations and financial performance. Constant Contact provides online marketing tools that are designed for small businesses, nonprofits, and associations worldwide.

Constant Contact Fails to Disclose Poor Customer Conversion Rates

According to the complaint, Constant Contact failed to disclose that its gross customer additions were lower than expected, that it suffered negative trends in consumer conversion rates, and that it was directing new clients toward the lowest-priced packages. As a result, the complaint alleges that the company’s statements about its business operations and prospects lacked a reasonable basis.

On July 23, 2015, after the market closed, Constant Contact announced its earnings results for the second quarter of 2015 with a weak third quarter outlook. The company experienced low trial-to-conversion rates in April and May of 2014, along with a significant swing in product mix, with about 80% of new clients choosing the least expensive email package over higher-priced offerings. On this news, Constant Contact stock fell $3.35 per share, or over 11%, to close at $26.18 per share on July 24, 2015, on unusually heavy volume.

Constant Contact 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.

 

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