Also Robbins Geller Rudman & Dowd Commenced Class Action Suit Against Carbonite

Robbins Geller Rudman & Dowd LLP announced that a class action has been commenced on behalf of purchasers of Carbonite, Inc.‘s common stock during the period between February 7, 2019 and July 25, 2019.

This action was filed in the US District of Massachusetts and is captioned Luna v. Carbonite, Inc., et al., No. 19-cv-11662.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Carbonite common stock during the class period to seek appointment as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today.

The complaint charges Carbonite and certain of its current and/or former officers with violations of the Securities Exchange Act of 1934. It is a software company that provides cloud-based backup services, including the Server Backup VM Edition for managed services providers, which was designed to allow them to protect their virtual data both locally and in their own cloud.

The complaint alleges that during the class period, defendants issued materially false and misleading statements and/or failed to disclose adverse information regarding the technological quality of the Server Backup VM Edition and its potential to add meaningfully to Carbonite’s financial performance for fiscal 2019.

Specifically, defendants failed to disclose that:

• (i) Carbonite’s Server Backup VM Edition was of poor quality and technologically flawed;
• (ii) Carbonite was receiving poor reviews and complaints from customers about the Server Backup VM Edition; and
• (iii) the poor quality and technological flaws of the Server Backup VM Edition were acting as a disruptive factor throughout the Carbonite sales force and keeping that sales organization from closing opportunistically on several larger deals during FY19.

As a result of this information being withheld from the market, the price of Carbonite common stock was artificially inflated to more than $29 per share during the class period.

Then, on July 25, 2019, Carbonite announced that it was withdrawing the Server Backup VM Edition from the marketplace and consequently lowering its financial projections for FY19 and FY20.

The same day, Carbonite’s CEO announced he was leaving the company. On this news, the price of company’s stock declined more than 24%, from a close of $23.90 per share on July 25, 2019 to a close of $18.01 per share on July 26, 2019.

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

Read also:
Attorney Ademi & O’Reilly Investigates Possible Securities Fraud of Carbonite
As Server VM Edition, launched in October 2018, was technically substandard, of poor quality, and being rejected by customers.
July 31, 2019 | Press Release