From the Wires
Saxena White P.A. Files Securities Fraud Class Action Against Mellanox Technologies Ltd.
By: Marketwired .
Feb. 22, 2013 11:00 PM
BOCA RATON, FL -- (Marketwire) -- 02/22/13 -- Saxena White P.A. has filed a securities fraud class action lawsuit in the United States District Court for the Southern District of New York against Mellanox Technologies Ltd. ("Mellanox" or the "Company") (NASDAQ: MLNX) on behalf of investors who purchased or otherwise acquired the common stock of the Company during the period from April 19, 2012 through January 2, 2013 (the "Class Period"). The complaint brings forth claims for violations of the Securities Exchange Act of 1934.
Mellanox is a fabless semiconductor company that produces and supplies interconnect products for computing, storage, and communication applications in the computing, Web 2.0, storage, financial services, database, and cloud markets. Mellanox's most lucrative product offering at the start of the Class Period was its InfiniBand product. InfiniBand technology is used to transfer and store data in high-end computing and data centers.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's financial performance and future prospects. According to the complaint, the true facts, which were known or recklessly disregarded by each of the defendants but concealed from the investing public during the Class Period, were as follows:
(i) Mellanox was receiving a continuous stream of customer complaints concerning glitches in its InfiniBand product;
(ii) Mellanox knew that the pace of a competitor's development of its own InfiniBand adaptor would diminish Mellanox's product offering and increase competition in the InfiniBand market in which Mellanox enjoyed a near monopoly; Mellanox knew that its outsized first and second quarter 2012 sales growth was not sustainable and was not the result of defendants' business acumen or growth in the InfiniBand market;
(iii) Mellanox's inventory was dramatically increasing, both at the Company and in the hands of at least one significant customer, which would decrease sales and profit margins going forward; and
(iv) as a result, Mellanox knew its actual sales growth supported neither its own fourth quarter 2012 guidance nor the inflated share price targets the investment community was modeling based on defendants' bullish Class Period statements and guidance.
According to the complaint, through a series of partial disclosures made between September 7, 2012 and January 3, 2013, the market learned that the Company's business was not as defendants had portrayed it throughout the Class Period. On September 7, 2012, Mellanox shares were downgraded from Buy to Hold. Then on October 18, 2012, Mellanox reported third quarter 2012 financial results and issued lower than expected fourth quarter 2012 fiscal guidance. Finally, at the end of the day on January 2, 2013, defendants were forced to concede that Mellanox had grossly missed its fourth quarter 2012 revenue guidance by upwards of 20%. This news, along with the earlier negative announcements, shocked the market causing the price of Mellanox stock to fall precipitously, on unusually high trading volume.
You may obtain a copy of the complaint and join the class action at www.saxenawhite.com. If you purchased Mellanox stock between April 19, 2012 and January 2, 2013, inclusive, you may contact Joe White or Marc Grobler at Saxena White P.A. to discuss your rights and interests.
If you purchased Mellanox common stock during the Class Period of April 19, 2012 through January 2, 2013, inclusive, and wish to apply to be the lead plaintiff in this action, a motion on your behalf must be filed with the Court no later than April 8, 2013. You may contact Saxena White P.A. to discuss your rights regarding the appointment of lead plaintiff and your interest in the class action. Please note that you may also retain counsel of your choice and need not take any action at this time to be a class member.
Saxena White P.A., located in Boca Raton, specializes in prosecuting securities fraud and complex class actions on behalf of institutions and individuals. Currently serving as lead counsel in numerous securities fraud class actions nationwide, the firm has recovered hundreds of millions of dollars on behalf of injured investors and is active in major litigation pending in federal and state courts throughout the United States.
Joseph E. White, III
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