Summary of Case: A securities class action has been filed against Align Technology, Inc. (ALGN) ("Align" or the "Company") on behalf of all securities purchasers from January 30, 2007 through October 24, 2007, inclusive ("Class Period") in the United States District Court for the Northern District of California.
The complaint alleges that throughout the class period defendants knew or recklessly disregarded that their public statements concerning Align's business, operations and prospects were materially false and misleading. Specifically, defendants failed to disclose or indicate that the Company had shifted the focus of its sales force to clearing backlog, causing a significant decrease in the number of new case starts. Consequently, defendants' misleading statements and omission of materially adverse information rendered their class period statements concerning the Company's business, operations and financial prospects materially false and misleading at all relevant times.
On October 24, 2007, Align held a conference call with analysts to discuss the Company's third quarter 2007 financial results announced that same day. During the conference call, the Company shocked the market when certain of its executive officers acknowledged that, among other things, in an effort to clear prior backlog "we did not focus enough effort on filling the pipeline for new case starts," and the Company had to refocus its field and channel marketing teams to generate new case growth.
The next day, as a result of this news, shares of Align declined more than 33%, or $9.63 per share, to close on October 25, 2007, at $19.07 per share, on unusually heavy volume of more than 12 million shares traded.
