A securities class action suit was recently filed against a camera manufacturer following claims that it violated federal securities laws by failing to disclose important information to investors.
The lawsuit against GoPro 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 Jul. 21, 2015 and Jan. 13, 2016, according to a press release. The class action complaint alleges that the company violated the Securities Exchange Act of 1934. For some time, GoPro has been the dominant player in the market for action cameras. The company’s products are hardy enough to be used by surfers, BMXers, snowboarders and other action sport participants, and have proven popular among this crowd. This success has made GoPro popular among all sorts of consumers, though it has faced some struggles recently, as the lawsuit indicates.
GoPro cameras have proven popular among extreme sports athletes.Third and fourth quarter guidance allegedly false and misleading
The class action filing alleges that the defendants made materially false and misleading statements to investors and/or failed to disclose relevant information. It claims that GoPro did not inform investors of the relatively weak sales for its HERO line of cameras. The lawsuit alleges that HERO4 Session sales were slow around the release of the company’s 2015 third quarter guidance. The guidance, the lawsuit claims, was based on the fact that sales for the HERO4 Session camera were expected to be strong.
The class action suit alleges that the company’s guidance for both the third and fourth quarter of 2015 was artificially inflated. It claims that as a result, GoPro’s statements about its operations, business and prospects were false and misleading and/or lacked a reasonable basis at all relevant times.
2016 projections also alleged to be false and misleading
According to a separate lawsuit the company again made false or misleading statements to investors regarding its projected first quarter sales. A disclosure that HERO4 Session camera sales were not performing as expected led the company’s stock to take a hit, according to Fortune. On Jan. 15, the company’s stock was around $11 per share, after peaking as high as $93.85 per share in October 2014 and nearing $65 per share last summer.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or info@battea.com.