NEW YORK, Feb. 11, 2013 /PRNewswire/ -- Bronstein, Gewirtz & Grossman, LLC announces that a class action suit was filed in the United States District Court for the Southern District of New York on behalf of purchasers who purchased common stock of Mellanox Technologies, Ltd. ("Mellanox" or the "Company") (NasdaqGS: MLNX-News) between April 19, 2012 and January 2, 2013, inclusive (the "Class Period").
On January 2, 2013 the Company Announced it will be lowering the Company's fourth quarter 2012 revenue guidance. Citing "a weaker demand environment, challenging macroeconomic conditions, and a technical issue associated with FDR 56Gb/s InfiniBand cabling which caused approximately $20 million of FDR deployments to be delayed" the Company revised its fourth quarter financial outlook to a range of $119 million to $121 million, sharply below the Company's previous guidance of $145 million to $150 million.
The complaint charges Mellanox and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges as follows: (1) Mellanox was receiving a continuous stream of customer complaints concerning glitches in its InfiniBand product; (2) that the Company knew that the pace of a competitor's development of its own InfiniBand adaptor would diminish Mellanox's product offering and increase competition in the InfiniBand market in which Mellanox enjoyed a near monopoly; (3) the Company knew that its outsized first and second quarter 2012 sales growth was not sustainable and was not the result of defendants' business acumen or growth in the InfiniBand market; (4) The Company's inventory was dramatically increasing, both at the Company and in the hands of at least one significant customer, which would decrease sales and profit margins going forward; and (5) as a result, Mellanox knew its actual sales growth supported neither its own fourth quarter 2012 guidance nor the inflated share price targets the investment community was modeling based on defendants' bullish Class Period statements and guidance.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts