Robbins LLP: Endurance International Group Holdings, Inc. (EIGI) Misled Shareholders According to a Recently Filed Class Action
Robbins LLP announces that an investor of Endurance International Group Holdings, Inc. (EIGI) (NASDAQGS: EIGI) has filed a federal securities fraud class action complaint in the U.S. District Court for the District of Massachusetts. The complaint alleges that the company and certain of its officers and directors violated the Securities Exchange Act of 1934 between November 4, 2014 and April 27, 2015.
Endurance Misrepresents Its Business Operations and Prospects
According to the complaint, defendants made materially false and misleading statements to investors by overstating its profits. Specifically, the complaint alleges that beginning in November 2014, Endurance issued false earnings and guidance reports that substantially overstated its Average Revenue per Subscriber and engaged in irregular accounting practices related to its international business.
Endurance stock declined $2.24, or 10%, to close at $19.70 per share on April 28, 2014, following the release of a report by the research firm Gotham City Research LLC. According to the report, among other things, as much as 16.5% of the company’s earnings were through related parties, 40% to 100% of the company’s reported profits were suspect, and the company reported that its 2014 Average Revenue per Subscriber grew by 11% when it actually shrank by 13%. As a result, the company’s normalized profits would fail to cover its interest expense.
Endurance 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.