SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/smithmicro/) today announced that a class action has been commenced in the United States District Court for the Central District of California on behalf of purchasers of Smith Micro Software, Inc. (“Smith Micro”) (NASDAQ:SMSI) common stock during the period between November 3, 2010 and May 4, 2011 (the “Class Period”).
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from today. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Darren Robbins of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/smithmicro/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The complaint charges Smith Micro and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Smith Micro designs, develops and markets software products and services for the mobile computing and communications industries.
The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company’s business prospects and financial results. As a result of defendants’ false statements, Smith Micro’s stock traded at artificially inflated prices during the Class Period, reaching a high of $16.87 per share on January 5, 2011.
On February 8, 2011, Smith Micro issued a press release announcing suspension of its 2011 full-year revenue guidance. The Company further reported it expected revenue to be in the range of $15 to $20 million for the first quarter of 2011 due to an expected significant reduction in orders for its core Connection Manager product from its key customer. On this news, Smith Micro’s stock dropped $4.56 per share to close at $8.50 per share on February 9, 2011. Then, on May 4, 2011, Smith Micro issued a press release announcing its first quarter 2011 financial results, reporting a net loss of ($7.8 million), or ($0.22) diluted earnings per share. On this news, Smith Micro’s stock declined another $1.60 per share to close at $5.66 per share on May 5, 2011, a one-day decline of 22% on high volume.
According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) Smith Micro’s 2010 revenue surge was not due solely to organic growth from real end-market demand, but rather it was partially due to an inventory build by the Company’s customers, including its largest customer Verizon; (b) the transition in the wireless industry from a 3G to a 4G network would not have a positive impact on Smith Micro’s operations; (c) defendants failed to disclose the risks to demand for its software associated with the launch of 4G devices by wireless carriers; (d) defendants concealed the impact of a growing industry trend, that of PC cards being displaced by mobile hotspots, and as a result of this shifting technological trend, demand for the Company’s core connectivity software would be negatively impacted; (e) demand for certain of Smith Micro’s new products was not as immediate and robust as defendants had represented it would be; and (f) Smith Micro failed to disclose known trends and uncertainties as required by SEC regulations concerning its revenue growth rate.
Plaintiff seeks to recover damages on behalf of all purchasers of Smith Micro common stock during the Class Period (the “Class”). The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.
Robbins Geller, a 180-lawyer firm with offices in San Diego, San Francisco, New York, Boca Raton, Washington, D.C., Philadelphia and Atlanta, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. The Robbins Geller Web site (http://www.rgrdlaw.com) has more information about the firm.