Robbins Geller Rudman & Dowd Files Class Action Suit Vs. SanDisk

Robbins Geller Rudman & Dowd LLP announced that a class action has been commenced on behalf of an institutional investor in the United States District Court for the Northern District of California on behalf of purchasers of SanDisk Corporation publicly-traded securities during the period between April 16, 2014 and April 15, 2015.

The complaint charges SanDisk and certain of its officers and directors with violations of the Securities Exchange Act of 1934.

SanDisk is a global provider of flash storage products.

The complaint alleges that during the class period, defendants issued materially false and misleading statements and/or omitted adverse information regarding the company’s operations, sales and product development, including that the company was experiencing production qualification delays on certain of its key products and lower than expected sales of enterprise products.

 Defendants also concealed problems associated with SanDisk’s acquisition of Fusion-io, Inc. in June 2014. Subsequently, the company was forced to announce drastically lower first quarter revenue estimates compared to prior forecasts and withdraw its 2015 forecasts entirely. As a result of defendants’ false statements, SanDisk securities traded at artificially inflated prices during the class period, with its stock price reaching a high of $107.83 per share on July 16, 2014. While SanDisk’s stock price was artificially inflated, the company’s top officers and directors were able to sell over $35.8 million worth of their SanDisk stock.

On March 26, 2015, SanDisk announced that it expected revenue for the first fiscal quarter of 2015 to be approximately $1.3 billion, rather than the previously forecast revenue of $1.40 billion to $1.45 billion, “primarily due to certain product qualification delays, lower than expected sales of enterprise products and lower pricing in some areas of the business.”

Moreover, the company announced that it expected these adverse trends to continue into 2015, and as a result, the company would not be able to make its other forecasts for the quarter or meet its 2015 revenue guidance. As a result of this news, SanDisk’s stock price fell $14.98 per share to close at $66.20 per share on March 26, 2015, a one-day decline of 18% on volume of 32.3 million shares.

Then, on April 15, 2015, after the market closed, SanDisk issued a press release announcing its first quarter fiscal 2015 financial results. The company reported net income of $39 million, or $0.17 diluted earnings per share, and revenue of $1.33 billion for the quarter ended March 29, 2015. The company also announced a write-down of $61 million associated with Fusion-io. As a result of this news, the price of SanDisk stock dropped $3.21 per share to close at $67.91 per share on April 16, 2015, a one-day decline of nearly 5% on volume of 23.6 million shares.

Plaintiff seeks to recover damages on behalf of all purchasers of SanDisk publicly traded securities during the class period. The plaintiff is represented by Robbins Geller, which has experience in prosecuting investor class actions including actions involving financial fraud.

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