SAN DIEGO and SUNNYVALE, Calif., June 10, 2013 /PRNewswire/ -- Shareholder rights attorneys at Robbins Arroyo LLP announce that a purchaser of Aruba Networks, Inc. (NASDAQ: ARUN) securities has filed a complaint in the U.S. District Court for the Northern District of California. The complaint alleges that Aruba and certain of its officers and directors violated the Securities Exchange Act of 1934 between May 17, 2012 and May 16, 2013 (the "Class Period"). Aruba provides network access solutions for the mobile enterprises worldwide.
Aruba Is Accused of Making False and Misleading Statements Regarding the Company's Ability to Compete with Cisco Systems, Inc.
The complaint alleges that during the Class Period, Aruba and certain of its officers and directors issued a series of materially false and misleading statements concerning the true nature of the company's business, operational, and compliance policies. On May 22, 2012, according to the complaint, an Aruba senior officer indicated, "that the Company would continue to gain market share from Cisco in the wireless and mobile solutions space, because wireless and mobile products are in the Company's "DNA."" Then on February 21, 2013, during a conference call with analysts, another senior officer indicated that Aruba was increasing its market share in the face of competition from Cisco. According to the complaint, those statements were false and/or misleading because: (i) Aruba did not hold a clear competitive advantage over Cisco; (ii) Aruba was aware of certain "bundling" advantages that Cisco held over the company; (iii) Cisco's bundling advantage undermined Aruba's future revenues; and (iv) as a result, Aruba's financial statements were materially false and misleading during the Class Period.
Aruba's Stock Price Falls Dramatically on the Announcement of Reduced Revenue and Heightened Competition from Cisco
On May 7, 2013, Aruba announced that it expected third quarter 2013 revenue to be approximately $144 million to $147 million, below the previously stated guidance of $159 million to $161 million. On this news, the company's stock price dropped 22% to close at $17.02 per share on May 7, 2013. On May 16, 2013, the company reported that its non-GAAP net income for the third quarter 2013 was $14 million, or $0.11 per diluted share, compared to $19.4 million, or $0.16 per diluted share for the same period 2012. Company officials attributed the earnings result to the "heightened level of competition and bundling strategy from our largest competitor [Cisco]." As a result of this news, the company's stock price dropped an additional 25%, or $4.51 per share, to close at $13.10 per share on May 17, 2013.
If you invested in Aruba and would like to discuss your shareholder rights, please contact attorney Darnell R. Donahue at (800) 350-6003, firstname.lastname@example.org, or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested. For more information, please go to http://www.robbinsarroyo.com.
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SOURCE Robbins Arroyo LLP