mail@shareholdersfoundation.com
A lawsuit on behalf of investors, who purchased their STEC, Inc. (Public, NASDAQ:STEC)
If you are a current long-term investor in STEC, Inc. (NYSE: STEC), you have certain options and you should contact the Shareholders Foundation, Inc. at:
Email: mail@shareholdersfoundation.com or at: +1 (858) 779 – 1554
An investor in STEC, Inc (STEC) has filed a lawsuit against STEC and certain of its executive officers over alleged violations of Federal Securities Laws by knowing or recklessly disregarding between June 16, 2009 and November 3, 2009 materially false and misleading statements regarding STEC’s customers, its competitive position and its prospects. The complaint alleges that during the Class Period, defendants issued STEC once had the solid-state drive market to itself. However, StEC specifically failed to disclose looming threats of competition from other high technology companies, such that STEC would not be the only company to gain design wins. Defendants assured investors that STEC had no competition at that stage. The plaintiff alleges that STEC falsely stated during June 16, 2009 and November 3, 2009 that its purported success was the result of the successful adaptation and use of STEC's ZeusIOPS products by EMC, IBM, or Sun Microsystems, when, in fact, IBM and Sun Microsystems were having significant difficulties integrating STEC's products. As a result of defendants’ false and misleading statements, STEC stock traded at artificially inflated prices during the Class Period, reaching a high of $41.84 per share on September 10, 2009. This inflated stock price permitted the top STEC officers to sell 9 million shares of their STEC stock in a secondary stock offering in August 2009. On September 17, 2009, WedBush Morgan published an analyst report on STEC stating that one of STEC’s customers was in final qualification stages with one of STEC’s competitors and that the Company’s competitors would be gaining design wins much earlier than previously expected. As a result of this report, STEC’s stock fell $6.37 per share to close at $31.53 per share on September 17, 2009 – a one-day decline of over 16%, on volume of more than 21.2 million shares. In addition the plaintiff alleges that between June 16, 2009 and November 3, 2009 STEC failed to disclose that STEC over sold its largest customer, ECM, more inventory than it required and thus overstated the demand for its ZeusIOPS SSD products such that its subsequent revenue and financial results for the following year would be materially negatively impacted. On November 3, 2009, after the market closed, STEC reported its third quarter 2009 financial results and its fourth quarter 2009 outlook and announced that one of its largest customers – which accounts for 90 percent of STEC's ZeusIOPS SSD business, and had placed a $120 million order for the second half of 2009 – would carry 2009 inventory into 2010, placing STEC's 2010 first quarter results at risk. As a result of this news, so the lawsuit, shares of STEC declined $9.01 per share, or more than 38%, to close on November 4, 2009, at $14.14 per share, on unusually heavy trading volume.
STEC, Inc., located in Santa Ana, California, designs, develops, manufactures and markets custom memory solutions based on flash memory and dynamic random access memory (DRAM) technologies. STEC, Inc. specializes in developing flash drives and memory cards used in sensitive and highly volatile environments and high-density DRAM modules. STEC, Inc. reported in 2007 Total Revenue of $188.65million with a Net Income of $4.29million and in 2008 Total Revenue of $227.44million with a Net Income of $10.01million. Those who are a current long term investor in shares of STEC, Inc. (Public, NASDAQ:STEC)
Those who are current long-term investors in STEC, Inc. (NYSE: STEC), have certain options and should contact the Shareholders Foundation, Inc. at:
Email: mail@shareholdersfoundation.com or at: +1 (858) 779 – 1554
Shareholders Foundation, Inc.
Trevor Allen
3111 Camino Del Rio North - Suite 423 –
92108 San Diego
Tel:+1-(858)-
Fax:+1-(858)-
mail@shareholdersfoundation.com
www.ShareholdersFoundation.com
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