A securities class action suit was filed against a flash storage company following allegations that it violated federal securities laws by failing to inform investors of certain market pressures negatively affecting it.
The lawsuit filed against Nimble Storage Inc. was filed in the U.S. District Court for the Northern District of California on behalf of investors who purchased shares in the company during the class period between May 27,2015 and Nov. 19, 2015, according to a press release. The firm specializes in flash-based data storage solutions. Along with Cisco Systems, it developed its SmartStack integrated infrastructure solutions portfolio. SmartStack offers a variety of features for users who wish to integrate network, computer and storage solutions.
“The lawsuit alleges that the company was losing sales in both markets.”
Fierce competition affects Nimble Storage’s strategy
The class action filing claims that Nimble Solutions violated the Securities Exchange Act of 1934. It alleges that the defendants failed to disclose that the company’s prospects were damaged by intense competition. Larger storage solutions providers were slashing prices in efforts to maintain their places in the market. This strategy was detrimental to Nimble Storage’s ability to attract and retain clients.
The lawsuit goes on to allege that the company also failed to disclose its choice to focus sales and marketing efforts toward the large enterprise market and cut down similar activity in the U.S. commercial market. As a result of this new strategy and competitors’ price slashing, the class action complaint alleges that the company was losing sales in both the large enterprise and U.S. commercial markets.
Detrimental effects of Nimble Storage’s strategy alleged undisclosed until Nov. 19
Nimble Storage announced on Nov. 19 that as a result of the company’s shift from the U.S. commercial market to the large enterprise market, its revenue growth was affected more than anticipated. In addition, the company noted that its enterprise investments were taking longer than originally forecasted to become productive. As a result, the announcement explained, the storage solutions provider was experiencing disappointing financial results. These details led stock prices to decline significantly, causing investors financial harm, according to the class action lawsuit.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or email@example.com.