A10 Networks Inc (NYSE: ATEN) Investor Securities Class Action Lawsuit 01/29/2015

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Company Name(s): 
A10 Networks
Case Name: 
A10 Networks Shareholder Class Action Lawsuit 01/29/2015
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NYSE: ATEN
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
01/29/2015
Class Period Begin: 
03/21/2014
Class Period End: 
01/29/2015
Deadline To File for Lead: 
03/30/2015
Date Settled: 
09/14/2016
Settlement Amount: 
$9,837,500
Deadline to Participate in Settlement: 
02/10/2017
Settlement Notice: 
Settlement Proof: 
Summary: 

The settlement includes all persons or entities that purchased or otherwise acquired A10 Networks Inc (NYSE: ATEN) common stock pursuant and/or traceable to the Registration Statement and Prospectus for the company's March 21, 2014 Initial Public Offering (IPO).

March 2, 2017 - The court approved the settlement.

February 24, 2017 - The court held a final settlement hearing.

September 14, 2016 - The court preliminarily approved the settlement.

June 30, 2016 - Parties filed a stipulation of settlement.

November 23, 2015 - The plaintiffs filed an amended consolidated complaint.

June 30, 2015 - The plaintiffs filed a consolidated complaint.

June 1, 2015 - Cases were consolidated.

January 29, 2015 - An investor in shares of A10 Networks Inc (NYSE: ATEN) filed a lawsuit against A10 Networks Inc in connection with the A10 Networks Inc's initial public stock offering on or about March 21, 2014.

The lawsuit was filed on behalf of purchasers who purchased of A10 Networks Inc (NYSE: ATEN) securities pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with the IPO on or about March 21, 2014.

The plaintiff alleges that the Registration Statement contained materially misleading information and/or omitted material information, and that it was not prepared in accordance with governing rules and regulations. More specifically the plaintiff alleges that company's registration statement emphasized A10 Networks Inc’s purportedly strong on-going sales growth rate without disclosing any then allegedly present downturn in that sales trend.

A10 Networks Inc reported that its annual Total Revenue rose from $120.07 million in 2012 to $141.74 million in 2013 and that its Net Loss declined from $90.15 million in 2012 to $27.10 million in 2013. On November 26, 2013, A10 Networks Inc filed with the Securities and Exchange Commission (“SEC “) a Registration Statement, which would later be utilized for the IPO in March 2014 following several amendments in response to comments by the SEC. On March 21, 2014, the SEC declared the Registration Statement effective and A10 Networks Inc and the underwriters priced the IPO at $15 per share and filed the final Prospectus for the IPO, which forms part of the Registration Statement. Shares of A10 Networks Inc (NYSE: ATEN) reached $16.50 per share on March 21, 2014 in the open market.

The plaintiff says that one section of the registration statement allegedly concealed that a significant portion of the 2013 sales growth was due to existing customers exchanging AX series product for the newly rolled out Thunder Series product. However, the plaintiff claims that A10 Networks Inc should have disclosed was that its 2013 sales growth had been substantially augmented by such product conversions, rather than through organic sales to new customers, and this upgrade cycle had largely extinguished itself by the time of the IPO.

The plaintiff claims that the products in the two product families are not interchangeable, and as A10 Networks’ Thunder Series product sales increased and AX Series products decreased, A10 Networks Inc built up an inventory of obsolete AX Series product.
The plaintiff says that despite the obsolete AX Series product on its books at allegedly inflated values, A10 Networks Inc took only a partial inventory write-down of $2.6 million at the end of fiscal 2013 and that significant obsolete inventory allegedly remained on A10 Networks' books at allegedly inflated values at the time of the IPO.

On May 1, 2014, A10 Networks Inc reported its first quarter 2014 financial results. A10 Networks Inc said that Total revenue for the first quarter grew 55 percent year-over-year to $45.7 million, compared with $29.6 million in the first quarter of 2013. On July 30, 2014, A10 Networks Inc reported its second quarter 2014 financial results. A10 Networks Inc said that its total revenue for the second quarter grew 50 percent year-over-year to $45.1 million, compared with $30.1 million in the second quarter of 2013.

Then on October 30, 2014, A10 Networks Inc reported its third quarter 2014 financial results. A10 Networks Inc said that its total revenue for the third quarter was $43.4 million, compared with $39.8 million in the third quarter of 2013.

Shares of A10 Networks Inc (NYSE: ATEN) declined to as low as $3.93 per share in early December 2014.