Comverse plunges after disappointing results
The claimant, who has submitted a class action suit for approval, contends that Mellanox's executives inflated the company's share price.
A request was filed today with the Tel Aviv District Court to approve a class-action suit of tens of millions of shekels against Mellanox Technologies Ltd. (Nasdaq:MLNX; TASE:MLNX), its chairman and CEO Eyal Waldman, CFO, and directors. The claimant contends that they "are responsible for misleading reports and presentations to shareholders, which showed the company's business in too favorable a light and did not reflect reality."
The claimant, Avigdor Weinberger, contends that Mellanox's executives inflated the company's share price to a level that was far above what it would have been without the reports and presentations. He says that, beginning on April 19, 2012, the company made a series of unexpected favorable announcements about its situation, including a revenue guidance of $125-130 million for the second quarter, well above forecasts; and that in July the company said that it had achieved record sales.
Weinberger says that, notwithstanding the misleading reports and presentations, the capital market began to discern Mellanox's real situation, beginning on November 7, 2012, and through the company's revenue warning of January 2, 2013. He says that during this period, investors realized that the company's business did not conform to its reports and presentations.
Discovery of Mellanox's real situation, as detailed by the statement of claim, on the dates during the relevant period, caused the company's share price to plummet. The share price fell 60% from its high point of NIS 480 to NIS 190, after the revenue warning.
Weinberger says that he represents all Mellanox shareholders who bought shares on the TASE between the publication of its financial report for the second quarter on April 19, 2012, through the revenue warning on January 2, 2013.
A similar lawsuit has been filed against Mellanox in a New York court.
Published by Globes [online], Israel business news - www.globes-online.com - on February 20, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013
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