NEW YORK, Jan. 29, 2019 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Arlo Technologies, Inc. ("Arlo" or the "Company") (NYSE: ARLO) and certain of its officers and directors. The class action, filed in United States District Court, Northern District of California, and indexed under 19-cv-00372, is on behalf of a class consisting of all behalf of persons and/or entities who purchased or otherwise acquired Arlo common stock pursuant or traceable to the Arlo's false and/or misleading Registration Statement and Prospectus (collectively, the "Registration Statement") issued in connection with the Arlo's August 3, 2018 initial public offering (the "IPO" or the "Offering"), who were damaged thereby, and who seek to pursue remedies under Sections 11 and 15 of the Securities Act of 1933 (the "Securities Act").
If you are a shareholder who purchased Arlo common stock pursuant and/or traceable to Arlo's August 3, 2018, IPO, you have until March 25, 2019, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Arlo was incorporated in 2018 and is headquartered in San Jose, California. The Company provides smart connected devices that can purportedly monitor environments in real-time using its cloud-based platform. This is accomplished by using a Wi-Fi or cellular network Internet connection in the Americas, Europe, the Middle-East, Africa, and the Asia Pacific regions. By using Arlo's cloud-based platform, consumers may engage in real-time with their families and businesses from any location with an internet connection. Arlo also offers Wi-Fi- and LTE-enabled cameras, advanced baby monitors, and smart security lights.
On August 6, 2018, Arlo filed its prospectus for its upcoming IPO with the SEC, which forms part of the Registration Statement. Arlo sold 11,747,250 shares of common stock at $16.00 per share in its IPO, for proceeds of approximately $167.4 million, net of underwriting discounts and commissions, purportedly to be used for general corporate purposes.
Arlo was a wholly-owned subsidiary of NETGEAR, Inc. ("NETGEAR") before the IPO. NETGEAR offers products enabling networking, broadband access, and network connectivity. NETGEAR owned approximately 84.2% of the shares of Arlo's outstanding common stock after the IPO.
On November 30, 2018, Arlo announced its "flagship wire-free security camera system" called Arlo Ultra ("Ultra"). The Company touted a "newly designed rechargeable battery" that would purportedly enable the Ultra product to provide 4K Ultra HD resolution with high dynamic range, color night vision, and advanced image processing.
The complaint alleges that Defendants made materially false and misleading statements regarding the Company's business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) there was a flaw and/or quality issue with Arlo's newly designed battery for its Ultra camera systems; (ii) this flaw and/or quality issue with the Ultra battery could result in a shipping delay of Arlo's Ultra product; (iii) such a shipping delay endangered Arlo's chances of launching the Ultra product in time for the crucial holiday season; (iv) such a shipping delay would allow Arlo's competitors to capitalize on the Ultra product's missed launch, thereby increasing their own market share; (v) Arlo's consumers had been experiencing battery drain issues and other battery-related issues in connection with recent firmware updates; (vi) because of the foregoing, Arlo's fourth quarter 2018 results and consumer base would be negatively impacted; and (vii) as a result, Arlo's Registration Statement was materially false and misleading at all relevant times.
On December 3, 2018, Arlo reported a delay in shipments of Ultra, citing "a quality issue with the battery from one of its suppliers" that was discovered during the product's final testing phase. As a result of the delay, Ultra also lowered its fourth-quarter 2018 financial guidance, advising investors that it anticipated "net revenue to be in the range of $125 million to $130 million, non-GAAP gross margin to be approximately 10%, and non-GAAP operating loss to be approximately 20% of revenue."
Following this news, Arlo's stock price fell $2.75 per share, or 22.86%, to close at $9.28 on December 3, 2018. This constituted a decline of $6.72, or approximately 42%, from the IPO price of $16.00 per share.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com
Robert S. Willoughby
888-476-6529 ext. 9980
SOURCE Pomerantz LLP