Cable network access tech vendor Casa Systems is facing an investor class action suit over the way it handled its December 2017 IPO.
According to one investor complaint being administered by San Diego law firm Robbins Arroyo LLP, Casa misled stock buyers when it “stated that its core CCAP products and new technology initiatives would allow for a compelling market opportunity and touted the fact that these initiatives would prompt Casa Systems to experience continued rapid growth.”
In fact, the plaintiff claims, “These documents were false and misleading as Casa Systems failed to disclose material information about the state of its customers' spending. In reality, Casa Systems knew its key customers' spending had entered a ‘digestion’ period that curtailed any new product purchases.”
On August 14, 2018, Casa reported disappointing financial data during its Q2 earnings call, cutting revenue guidance for the year by $50 million, the suit states. This resulted in a 23% decline in the company’s share price on the Nasdaq.
After opening at $14.40 in December 2018, stock for Andover, Massachusetts-based Casa Systems is trading at around $6.27 a share, as of Friday morning.
For its part, the Los Angeles-based Schall Law Firm has also issued a press release, and is also asking any investor who feels misled regarding Casa’s IPO to join the fight.
Casa Systems saw improved revenue performance in the second quarter of this year, following a miserable Q1 in which sales plunged over 50%. The company continues to struggle with the same market conditions as everyone else involved in making tech gear for the cable access business — customers are weighing complicated decisions to move toward Distributed Access Architecture network designs, along with a migration to virtualized environments. Product ordering has slowed as they mull these decisions.
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