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Investigation on Behalf of Investors in STEC...
This is a Press Release edited by StorageNewsletter.com on Fri, November 6th, 2009
By Former Attorney General of Louisiana and KSF Law Firm
Former Attorney General of Louisiana, Charles Foti, Esq. and the law firm of Kahn Swick & Foti, LLC has commenced an investigation into STEC, Inc. to determine whether it has violated federal securities laws by issuing false and misleading statements to its shareholders between the dates of 6/16/09 to 11/3/09.
On November 3, 2009, shares of STEC lost over thirty percent of their value after the company lowered its 2009 guidance below Wall Street's outlook, citing inventory surpluses at one of its largest customers, EMC. STEC, which designs, develops, manufactures, and markets solid-state computer memory drive products, including the ZeusIOPS solid state drives, warned that EMC is carrying an inventory glut, suggesting that demand for STEC's solid state drives could be weaker than expected. While analysts expected some inventory build by the first quarter of 2010, the glut of inventory in the third quarter of 2009 came as a complete surprise to analysts and investors.
KSF is investigating whether the immediate decline in the price of STEC shares has been driven by the fact that as recently as August 3, 2009, STEC’s corporate insiders, including Manouch Moshayedi, the Company’s Chief Executive Officer and Chairman of the Board, and his son, Mark Moshayedi, its President, Chief Operating Officer, Chief Technical Officer and Secretary, sold off as many as 10.35 million shares of their privately held STEC shares in a registered Secondary Offering, to realize gross proceeds of approximately $320,850,000.00, prior to any disclosure regarding the severe inventory build up at EMC. According to media reports, EMC is responsible for as much as 90% of the Company’s Zeus solid state hard drive sales.
On November 3, 2009, shares of STEC lost over thirty percent of their value after the company lowered its 2009 guidance below Wall Street's outlook, citing inventory surpluses at one of its largest customers, EMC. STEC, which designs, develops, manufactures, and markets solid-state computer memory drive products, including the ZeusIOPS solid state drives, warned that EMC is carrying an inventory glut, suggesting that demand for STEC's solid state drives could be weaker than expected. While analysts expected some inventory build by the first quarter of 2010, the glut of inventory in the third quarter of 2009 came as a complete surprise to analysts and investors.
KSF is investigating whether the immediate decline in the price of STEC shares has been driven by the fact that as recently as August 3, 2009, STEC’s corporate insiders, including Manouch Moshayedi, the Company’s Chief Executive Officer and Chairman of the Board, and his son, Mark Moshayedi, its President, Chief Operating Officer, Chief Technical Officer and Secretary, sold off as many as 10.35 million shares of their privately held STEC shares in a registered Secondary Offering, to realize gross proceeds of approximately $320,850,000.00, prior to any disclosure regarding the severe inventory build up at EMC. According to media reports, EMC is responsible for as much as 90% of the Company’s Zeus solid state hard drive sales.
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