STEC, Inc. (2010)
Class Period: Nov 4, 2009 to Feb 23, 2010
Lead Plaintiff Deadline: May 3, 2010 + Deadline passed
Summary of Case:
A securities class action has been filed against STEC, Inc. (STEC) ("STEC" or the "Company") on behalf of all securities purchasers from November 4, 2009 through February 23, 2010, inclusive ("Class Period"), in the United States District Court for the Central District of California.
The complaint alleges that on November 3, 2009, STEC represented in a conference call that EMC's inventory of STEC's SSD products was affecting STEC's sales, but that this problem could be ameliorated by energizing sales force efforts and increasing consumer education about SSDs. In fact, however, the problem was not a lack of sales force effort or consumer knowledge about SSDs, but consumer resistance to purchasing the ultimate product due to its cost, performance, and flexibility of use.
Then, on February 23, 2010, STEC revealed that it believed "the first half of 2010 will be a trough period for our business due to an inventory carryover by our largest customer [EMC] . . . [B]ased on our best estimates we now anticipate [the EMC] inventory carryover to continue to negatively impact our sales to this customer during the first half of 2010, as we do not expect any meaningful production orders from this customer during that time." As a result, STEC is earning half the revenue analysts predicted STEC would earn. As a result of this surprise announcement, STEC shares dropped over 23% in value on February 24, 2010, a decline of $3.15 on extraordinary trading volume, and have not recovered.
If you purchased this company's shares during the Class Period and suffered a loss or for further information about the case, please review the links below.