Arlo Technologies, Inc. (ARLO) Accused of Misleading Investors About Its Leading Product’s Battery Issues
According to the complaint against the company’s officers and directors for alleged violations of the Securities Act of 1933 in connection with Arlo’s August 3, 2018 initial public offering (“IPO”), Arlo sold 11,747,250 shares of common stock at a price of $16.00 per share, raising approximately $167.4 million in proceeds. On November 30, 2018, Arlo announced its “flagship wire-free security camera system” known as Arlo Ultra that used a newly designed rechargeable battery. Just days later, on December 3, 2018, Arlo reported a delay in shipments of Ultra, citing a quality issue with its battery. As a result, Arlo is not expected to ship the product until the first quarter of 2019, missing the crucial holiday season. When Arlo lowered its fourth quarter 2018 financial guidance, Arlo’s stock price closed at $9.28 per share on December 3, 2018—a 42% decline from its IPO price.
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