Robbins Arroyo LLP: SolarWinds, Inc. (SWI) 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 Western District of Texas Austin Division. The complaint alleges that officers and directors of SolarWinds, Inc. (NYSE: SWI) violated the Securities Exchange Act of 1934 between April 28, 2015 and July 16, 2015, by making materially false and misleading statements about SolarWinds’ business prospects. SolarWinds, together with its subsidiaries, designs, develops, markets, sells, and supports enterprise-class information technology (“IT”) and infrastructure management software to IT professionals in various organizations worldwide.
SolarWinds Misrepresents its Financial Condition
According to the complaint, SolarWinds officials failed to disclose that the company’s domestic business was struggling against the company’s expectations, and its license sales growth of core license products and resulting revenue was also lower than expectations and guidance. Further, the complaint alleges that company officials did not reveal that the company’s online marketing campaign tool was not performing as expected, which led to an unrealistically positive assessment of the company’s financial well-being, and caused its securities to be artificially inflated.
On April 28, 2015, SolarWinds issued a press release stating that the company was pleased with its first quarter revenue growth and emphasized the strength of its hybrid financial model. Then, on July 16, 2015, SolarWinds disclosed its revenues for the second quarter of 2014 were below analyst expectations and lowered revenue guidance for the next few quarters. The company attributed the slowdown to the underperformance of its marketing campaign tool, which failed to convert prospective customers. On this news, SolarWinds shares declined $11.51 per share, or over 24%, to close at $35.54 per share on July 17, 2015.
SolarWinds 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.