Aerohive Accused of Hiding Sales Execution Problems

According to the complaint, on November 1, 2017, Aerohive (NYSE: HIVE) held a conference call with investors and analysts, during which Aerohive officials touted the company's "significant sales efficiency" and "improved sales productivity" while predicting revenue in fourth quarter 2017 to be between $40 million and $42 million. Aerohive also pointed out that its restructured leadership team had the capacity to take on global sales leadership. Aerohive officials did not reveal that there were underlying sales execution issues that were uncovered at the end of the third quarter 2017, which in turn caused Aerohive to overstate guidance for the fourth quarter 2017. On January 16, 2018, Aerohive disclosed that it expected revenue for the fourth quarter 2017 to be only $37 million, citing underperforming sales team members. Following the disappointing news, Aerohive's stock fell nearly 29%, to close at $4.07 per share on January 17, 2018.