LOS ANGELES--(BUSINESS WIRE)--Glancy Binkow & Goldberg LLP today announced that class actions are pending in the United States District Court for the Northern District of California on behalf of purchasers of Envivio, Inc. (“Envivio”) (NASDAQ:ENVI) common stock pursuant or traceable to the Company’s allegedly false and misleading Registration Statement and Prospectus issued in connection with its April 24, 2012 initial public offering (“IPO”), seeking to pursue remedies under the Securities Act of 1933 (“1933 Act”).
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Michael Goldberg, Esquire, of Glancy Binkow & Goldberg LLP, 1925 Century Park East, Suite 2100, Los Angeles, California 90067, by telephone at 310-201-9150 or Toll Free at 888-773-9224, by e-mail to email@example.com, or visit our website at http://www.glancylaw.com.
Envivio provides software-based IP video processing and distribution solutions to mobile and broadband service providers. Envivio filed its Prospectus for the IPO on April 25, 2012, selling approximately 7.755 million shares to the public at $9 per share, raising almost $70 million in gross proceeds. The complaint charges defendants with issuing a materially false and misleading Registration Statement and Prospectus in connection with Envivio’s IPO in violation of the 1933 Act.
On August 13, 2012, the Company issued a press release announcing that it expected revenues in the range of $10-$11 million instead of its previously issued guidance of $17-$18 million for the quarter ending July 31, 2012. On this news, Envivio’s stock declined more than 56% on high volume – a decline of more than 72% off the IPO price.
Then, after the market closed on September 6, 2012, Envivio announced disappointing guidance for its fiscal 2012 third quarter. Thereafter, during a conference call with investors, Envivio’s executives acknowledged that the Company was experiencing a significant number of project delays with its existing customers, particularly in North America and Western Europe, which had been key growth areas for the Company. Defendants further admitted that the Company had also been experiencing a severe lengthening in its sales cycle for obtaining new business. On this news, Envivio’s stock price dropped another 20% on high volume.
The complaint alleges that the true facts, which were omitted from the Registration Statement and Prospectus for the IPO were that: (a) Envivio’s largest customers did not view Envivio’s services as a spending priority and as a result they were not increasing their demand for Envivio’s services to the extent represented due to budgetary constraints; (b) Envivio was experiencing a severe lengthening in its sales cycle for closing new business; (c) Envivio was having trouble maintaining a competitive advantage and was losing deals to rival Harmonic Inc.’s video processing technologies; and (d) Envivio’s past revenue results were not indicative of its future operations as the Company’s business was not growing as fast as represented, particularly in North America and Western Europe.
Plaintiff seeks to recover damages on behalf of all purchasers of Envivio common stock in or traceable to the IPO (the “Class”). The plaintiff is represented by Glancy Binkow & Goldberg LLP, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
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