Zeldes Haeggquist & Eck Investigates Violin Memory

Zeldes Haeggquist & Eck, LLP, has commenced an investigation on behalf of purchasers of Violin Memory, Inc. stock pursuant and/or traceable to Violin Memory’s September 27, 2013 IPO.

Violin Memory develops and supplies memory-based storage systems that are designed to enhance storage performance with high-speed applications, servers, and networks. The company sells its products through its global direct sales force, systems vendors, resellers, and other channel partners in the Americas, Europe, and Asia.

IPO was held just days before the 2013 U.S. government shutdown. This was significant to Violin Memory, because the U.S. government is a large, indirect customer of the company. According to its registration statement, its customer CompSec represented 12% of total 2013 revenues, and CompSec purchased Violin Memory’s products for resale to the federal government.

In the IPO, Violin Memory sold 18 million shares of its common stock at $9.00 per share, raising approximately $162 million in gross proceeds for the company. The performance of the common stock has since fallen dramatically. Violin Memory common stock now trades around $3.36 per share, or almost one third of the price at which it was offered in the IPO. Analysts have reduced their ratings and price targets for the company’s stock.

Zeldes Haeggquist & Eck is investigating whether the registration statement and prospectus used by Violin Memory to sell its common stock in the IPO were negligently prepared and contained false and misleading statements, and/or failed to disclose, among other things, that at the time of the IPO, the company’s sales had been, and would continue to be, adversely affected by the impending government shutdown and that its sales growth and profit margins were declining, resulting in reduced profits at the time of the IPO.