Switch Inc (NYSE: SWCH) Investor Securities Class Action Lawsuit 06/11/2018

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Company Name(s): 
Switch
Case Name: 
Switch Shareholder Class Action Lawsuit 06/11/2018
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: SWCH
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
06/11/2018
Class Period Begin: 
10/06/2017
Class Period End: 
06/11/2018
Court of Filing: 
U.S. District Court for the District of New Jersey
Deadline To File for Lead: 
08/10/2018
Summary: 

June 11, 2018 - An investor in shares of Switch Inc (NYSE: SWCH) filed a lawsuit in the U.S. District Court for the District of New Jersey over alleged violations of Federal Securities Laws by Switch Inc in connection with certain allegedly false and misleading statements in connection with Switch’s Initial Public Offering (“IPO”) commenced on or around October 6, 2017.

Las Vegas, NV based Switch Inc, through its subsidiary, Switch Ltd, provides colocation space and related services to technology and digital media companies, cloud and managed service providers, financial institutions, government agencies, and telecommunications providers that conduct critical business on the Internet. On October 6, 2017, Switch Inc sold 31,250,000 million shares of stock in its initial public stock offering (the "IPO"), at $17 a share raising $531,250,000 in new capital. On April 2, 2018, Switch Inc announced its fourth quarter and 2017 financial results. Switch Inc reported that its annual Total Revenue rose from $318.35 million in 2016 to $378.27 million in 2017 and that its Net Income of $31.36 million in 2016 turned into a Net loss of $8.58 million in 2017. In addition, Switch Inc provided its fully year 2018 guidance.

According to the complaint the plaintiff alleges on behalf of purchasers of Switch Inc (NYSE: SWCH) common shares that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that defendants made false and/or misleading statements and/or failed to disclose that Switch’s Grand Rapids and Atlanta facilities would never be as profitable as its Las Vegas facility, diminishing the yield on Switch’s recent capital expenditures acquiring and building out those facilities will bear, that Switch Inc’s high capital expenditures to create high redundancy levels at its facilities were not as profitable as they once had been in the past, that Switch Inc had already spent an additional more than $64 million on unbudgeted capital expenditures during the third quarter of 2017 that was not disclosed to investors until after the IPO, that Switch Inc recognized $9.4 million in revenues during FY17 that it would not provide colocation services for until FY18, meaning its reported FY17 revenue growth and its FY18 revenue prospects were both overstated, that eBay, Switch Inc’s largest colocation customer, would not be taking possession of colocation space it had reserved at Switch Inc’s Tahoe/Reno facility in early 2018, and that as a result of the foregoing, at the time of the IPO, Switch Inc’s business and financial prospects were not what defendants had led the market to believe they were in the Registration Statement.