SAN DIEGO & JERSEY CITY, N.J.--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that a class action complaint was filed against SITO Mobile, Ltd. (NASDAQCM: SITO) in the U.S. District Court for the District of New Jersey. The complaint is brought on behalf of all purchasers of SITO securities between February 9, 2016 and January 2, 2017, for alleged violations of the Securities Exchange Act of 1934 by SITO's officers and directors. SITO operates as a mobile location-based advertising platform for businesses, advertisers, and brands in the United States and Canada.
View this information on the law firm's Shareholder Rights Blog: www.robbinsarroyo.com/shareholders-rights-blog/sito-mobile-ltd
SITO Accused of Overestimating Media Placement Revenues
According to the complaint, in a series of filings with the U.S. Securities and Exchange Commission, SITO touted positive financial results, stating that the company was particularly encouraged by its continued revenue momentum. SITO's Chief Executive Officer, Jerry Hug, further predicted in a conference call that, "The 2016 Elections will see significant political ad budget move from TV to mobile due to higher engagement levels and better targeting capabilities." The company subsequently reported that it was driving record bookings, seeing higher levels of customer engagement, and that its "pool of opportunities is increasing as current and prospective clients begin to recognize, appreciate and embrace the value of SITO Mobile's location-based marketing platform."
However, the complaint alleges that SITO officials failed to disclose that: (1) SITO's growth of bookings would not propel its fourth fiscal quarter 2016 ("4Q 2016") media placement revenues and revenue growth as it had represented; (2) SITO was aware that the election would impact the company's 4Q 2016 revenue; (3) clients' campaign spending and media placement revenues in 4Q 2016 were highly dependent on the elections; and (4) the company's growth in media placement revenues would not occur in 4Q 2016. On January 3, 2017, SITO issued a press release announcing that its fourth quarter was "negatively affected this year by restrained advertising spending during a period of heightened and elongated media focus on this year's U.S. election." Hug further admitted that the company had underestimated the effects of this year's election on the company's clients' campaign spending, and that revenue dropped off dramatically during the election window. On this news, SITO's stock fell 32% to close at $2.50 per share on January 3, 2017.
SITO Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, DDonahue@robbinsarroyo.com, or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in 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.
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