Robbins Geller Rudman & Dowd LLP Files Class Action Suit against Violin Memory, Inc.

NEW YORK--()--Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) (http://www.rgrdlaw.com/cases/violinmemory/) today announced that a class action has been commenced in the United States District Court for the Northern District of California on behalf of purchasers of Violin Memory, Inc. (“Violin Memory”) (NASDAQ:VMEM) common stock pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with Violin Memory’s September 27, 2013 initial public stock offering (the “IPO”).

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from November 26, 2013. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff’s counsel, Samuel H. Rudman or David A. Rosenfeld of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at djr@rgrdlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.rgrdlaw.com/cases/violinmemory/. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing at this time and remain an absent class member. Any purchaser of Violin Memory is invited to contact us concerning their eligibility to serve as a lead plaintiff in this action, regardless of the date of their purchase.

The complaint charges Violin Memory, certain of its officers and directors and the underwriters of the IPO with violations of the Securities Act of 1933. Violin Memory develops and supplies memory-based storage systems to enhance storage performance with high-speed applications, servers, and networks in the Americas, Europe, and the Asia Pacific.

The complaint alleges that Violin Memory conducted its IPO during the lead-up to the 2013 U.S. government shutdown, which was of significant importance to Violin Memory because the U.S. government is a large indirect customer of the Company. According to the complaint, the Registration Statement and Prospectus used by defendants to sell Violin Memory shares in the IPO (and thereafter) were negligently prepared and contained false and misleading statements and/or failed to disclose, among other things, that at the time of the IPO Violin Memory’s sales had already been adversely affected by the looming government shutdown. Moreover, the complaint alleges the Company’s sales and research and development expenses had significantly grown during the third quarter 2013, increasing its cash burn-rate to an unsustainably high rate based on the Company’s cash on hand. Thus, the complaint alleges that Violin Memory’s sales growth and profit margins were declining, bringing its profits down at the time of the IPO.

The complaint alleges that due to these misstatements and omissions, the IPO was successful for the defendants and the Company sold 18 million shares of Violin Memory common stock to the public at $9 per share, raising $162 million in gross proceeds for the Company. However, the complaint alleges that Violin Memory stock currently trades around $3.30 per share, a 65% decline from the IPO price, and that analysts have slashed their ratings and price targets on the stock following disclosures, among other things, that “[a]s a result of unexpected reprioritization of budgets ahead of the federal government shutdown, some … forecasted [sales] were cancelled and others were deferred to future quarters pending funds being allocated to the project[s],” and that Violin Memory incurred increased sales and marketing costs during the third quarter of 2013.

Plaintiff seeks to recover damages on behalf of all purchasers of Violin Memory common stock pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with Violin Memory’s September 27, 2013 IPO. The plaintiff is represented by Robbins Geller, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

Robbins Geller represents U.S. and international institutional investors in contingency-based securities and corporate litigation. With nearly 200 lawyers in ten offices, the firm represents hundreds of public and multi-employer pension funds with combined assets under management in excess of $2 trillion. The firm has obtained many of the largest recoveries and has been ranked number one in the number of shareholder class action recoveries in MSCI’s Top SCAS 50 every year since 2003. Please visit http://www.rgrdlaw.com for more information.

Contacts

Robbins Geller Rudman & Dowd LLP
Samuel H. Rudman, 800-449-4900
David A. Rosenfeld
djr@rgrdlaw.com

Release Summary

The suit alleges defendants issued false statements concerning Violin Memory’s financial condition and business prospects, resulting in its stock trading at inflated prices.

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Contacts

Robbins Geller Rudman & Dowd LLP
Samuel H. Rudman, 800-449-4900
David A. Rosenfeld
djr@rgrdlaw.com