Robbins LLP: Avid Technology, Inc. (AVID) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that a class action complaint was filed against Avid Technology, Inc. (NASDAQGS: AVID) in the U.S. District Court for the District of Massachusetts. The complaint is brought on behalf of all purchasers of Avid securities between August 4, 2016 and November 9, 2016, for alleged violations of the Securities Exchange Act of 1934 by Avid’s officers and directors. Avid develops, markets, sells, and supports software and hardware for digital media content production, management, and distribution worldwide. Among its product offerings is a software defined storage platform known as NEXIS.
Avid Accused of Overstating Its Bookings and Revenue Guidance
According to the complaint, on August 3, 2016, Avid announced its second quarter 2016 financial results and increased its fiscal year 2016 financial guidance. Avid officials emphasized that the company’s 2016 revenue had increased more than 22% year-over-year driven by ongoing “recurring revenue growth.” Avid officials increased the upper end of the company’s bookings and revenue guidance for the third quarter and fiscal year 2016. On this news, Avid’s stock price increased more than 8% on unusually high trading volume of almost 2.4 million shares on August 4, 2016. The complaint alleges, however, that Avid officials failed to disclose that because Avid had not launched all the enterprise level features for NEXIS, its enterprise customers were deferring renewals and purchases of Avid’s existing products as they waited for the release of the enterprise features.
On November 9, 2016, Avid revealed that both its third quarter 2016 bookings and revenues had come in considerably lower than the company had led investors to expect, citing “the transition of the storage product line,” and disclosing that “some existing enterprise clients deferred normal upgrade and renewal decisions and new customers postponed investments until the release of functionality targeted to the enterprise market.” On this news, Avid’s stock price plummeted 28%, closing at $4.52 per share on November 10, 2016.
Avid 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.