… And Also by Rigrodsky & Long

Rigrodsky & Long, P.A., including former Special Assistant United States Attorney, Timothy J. MacFall, announces that a complaint has been filed in the United States District Court for the Northern District of California on behalf of all persons or entities that purchased the common stock of Fusion-io, Inc. between August 10, 2012 and October 23, 2013, inclusive, alleging violations of the Securities Exchange Act of 1934 against the company and certain of its officers.

Fusion-io provides solutions for enterprises, hyperscale datacenters, and small to medium enterprises, or SMEs, that accelerate databases, virtualization, mission-critical applications, cloud computing, big data, and information systems. The complaint alleges that throughout the class period, defendants made materially false and misleading statements, and omitted materially adverse facts, about the company’s business, operations and prospects.

Specifically, the complaint alleges that the defendants mislead the investing public that the company was a market leader in large-scale flash memory applications and was not facing any competitive pressure or risk from the commoditization of flash memory products. Further, the defendants issued unrealistically positive revenue guidance and misrepresented that the company was able to anticipate the demand from its strategic customers based on its years of experience as their flash memory supplier. As a result of defendants’ false and misleading statements, the company’s stock traded at artificially inflated prices during the Class Period.

According to the complaint, on January 30, 2013, Fusion-io shocked investors when it announced that it no longer anticipated achieving its previously issued revenue guidance for fiscal year 2013.

However, defendants propped up the price of the company’s stock by misrepresenting the reason for the change in guidance as a temporary two-quarter shift in the timing of purchases from Facebook and Apple. Then, on October 23, 2013, the company revoked its prior revenue guidance and announced that its expected gross margin in 2014 would fall.

Further, on the same day, the company announced that its CFO and chief sales officer were leaving the company. These disclosures lead stock analysts to conclude that lower growth revenue and falling margins could only mean that the competitive pressures facing the company were more significant than represented.

On this news, shares in Fusion-io dropped more than 24%, closing at $9.82 per share on October 24, 2013, on heavy trading volume of over 29 million shares.