Class Period: Apr 24, 2008 to Jul 22, 2009
Lead Plaintiff Deadline: Aug 13, 2010 + Deadline passed
Summary of Case:
A securities class action has been filed against Celera Corporation (CRA) ("Celera" or the "Company") on behalf of all securities purchasers from April 24, 2008 through July 22, 2009, inclusive ("Class Period"), in the United States District Court for the Northern District of California.
The complaint alleges that during the Class Period, defendants issued false and misleading statements regarding the Company's business and financial results, repeatedly assuring investors that the Company would be able to increase the amount of its Lab Services business that was under contract, thus making its ability to collect on its receivables more predictable and less costly and time consuming. Defendants further assured investors that the Company was adequately reserving for its bad debts. As a result of defendants' false statements, Celera stock traded at artificially inflated prices throughout the Class Period, trading as high as $16.23 per share in September 2008.
On July 22, 2009, the Company announced that its "second quarter 2009 revenues relative to the prior year quarter [were] expected to show a reduction for the Company's Lab Services business." According to the Company, the Lab Services revenues were "adversely affected by lower than anticipated sample volume due to broad economic pressures, lost business as a result of the Company's efforts to collect aged receivables, and the denial of reimbursement on a number of legacy . . . tests by certain payors in some regions." In addition, Celera expected to record "significant charges in the second quarter of 2009 for bad debt expense and impairment of goodwill and intangible assets." On this news, Celera's stock tumbled $1.91 per share to close at $5.83 per share on July 23, 2009, a one-day decline of nearly 25% and a 64% decline from the stock's Class Period high.
According to the complaint, the true facts, which were then known by or available to the defendants during the Class Period, were: (a) Celera was not adequately reserving for its allowance for bad debts in violation of Generally Accepted Accounting Principles, causing its financial results to be materially misstated; (b) the Company had failed to maintain effective internal controls concerning its billing and collections processes; and (c) the Company could not substantially increase its Lab Services business that was under contract with third-party insurance payors and thus could not reduce its exposure to uncollectible accounts receivables.
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.