The investigation concerns whether Connecture and certain of its officers and/or directors have violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
On May 9, 2016, Connecture reiterated the Company's full year 2016 guidance for total revenues to be in the range of $100.0 million to $110.0 million. Then, on August 8, 2016, Connecture lowered its full year 2016 guidance for total revenues to be in the range of $85.0 million to $88.0 million. The Company attributed the lowered full year 2016 guidance primarily to: (1) year-to-date revenue results being below Connecture's initial expectations; (2) reduced revenue expectations in Connecture's Private Exchange business for the remainder of the year due to slower customer adoption of its solutions than originally anticipated; (3) the impact of certain of Connecture's Enterprise/Commercial customers transitioning from maintenance of their existing platforms to upgrades to the Company's newest platform; and (4) the impact of Connecture's decision to reduce its focus on the State/Medicaid opportunity.
On this news, Connecture's stock price fell $0.78, or 30.71%, to close at $1.76 on August 9, 2016.
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Robert S. Willoughby
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SOURCE Pomerantz LLP