SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP announces that a securities class action case was filed on behalf of purchasers of Gogo Inc. (NASDAQ:GOGO) securities between February 27, 2017 and May 7, 2018 (the “Class Period”). This action was filed in the U.S. District Court for the Northern District of Illinois, is captioned Pierrelouis v. Gogo, Inc., No. 1:18-cv-04473, and is assigned to Judge Alonso.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Gogo securities during the Class Period to seek appointment as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff or have questions concerning your rights, please contact Brian Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at firstname.lastname@example.org. Lead plaintiff motions must be filed with the court no later than 60 days from June 27, 2018.
The complaint charges Gogo and certain of its officers and directors with violations of the Securities Exchange Act of 1934 by issuing materially false and misleading statements and/or failing to disclose adverse facts about the Company’s business, operations, and prospects, including that Gogo’s 2Ku system antenna had more reliability issues than the public was led to believe, required costly installation, and had remediation challenges or required replacement due to infiltration by plane de-icing fluids, as well as manufacturing and software issues. And, as a consequence of these issues, Gogo would not be able to meet its 2018 guidance. As a result of defendants’ false statements and/or omissions, Gogo shares traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $14 per share.
On March 5, 2018, Gogo announced the sudden departure of its long-time CEO, defendant Michael J. Small. Gogo replaced defendant Small with defendant Oakleigh Thorne, a director of the Company since 2003. In a thinly veiled rebuke of his predecessor’s conduct, the Company’s new CEO began his earnings call remarks by proclaiming that his goal was “to develop an open relationship with the financial community so that investors can make informed decisions about investing in Gogo.” The Company disclosed, in relevant part, that it had “discovered that while deicing was the biggest [2Ku] issue, there are also some manufacturing issues and software issues at fault. We also discovered the deicing fluid entered the antenna array down through far more pathways than we originally thought.” These issues resulted in increased operational costs, maintenance expenses and capital expenses for new antenna inventory, and lower service revenues. And despite Gogo’s repeated, albeit false, assurances throughout the Class Period that it was on target to become free cash flow positive in 2019, Gogo disclosed that it was “withdrawing its previously provided 2018 guidance for Adjusted EBITDA, airborne Cash CAPEX, and airborne equipment inventory purchases related to airline-directed installations, as well as Free Cash Flow guidance.” On this news, Gogo’s stock price fell more than 13%.
Then, on May 7, 2018, after the market closed, Moody’s downgraded Gogo, moving it from “highly speculative” to “substantial risks,” with a negative outlook that could lead to even further rating cuts in the near term. Moody’s credit rating downgrades were due, in large part, to the 2Ku system’s “performance degradation.” On this news, Gogo’s stock price declined another 36% to close at $5.06 per share on May 8, 2018.
Robbins Geller is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For five consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in both the amount recovered for shareholders and the total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.