Finisar investor files lawsuit over federal violations
The Shareholders Foundation has announced that it is conducting an investigation for current long term investors in Finisar Corporation (Finisar), over possible breaches of fiduciary duties.
The complaint filed in the United States District Court for the Northern District of California says that the plaintiff, an investor in Finisar alleges on behalf of purchasers of Finisar common stock (NASDAQ: FNSR) during the period between December 2, 2010 and March 8, 2011, that the company violated the Securities Exchange Act of 1934. The company allegedly issued materially false and misleading statements regarding its business and financial results between December 2, 2010 and March 8, 2011.
Meanwhile an investigation on behalf of current long term investors of Finisar, including and in particular those who purchased (also) prior to December 2010 FNSR shares and presently continue to hold those shares was announced.
The investigation by a law firm on behalf of current long term investors in stock of Finisar is concerned whether certain current and/or former officers and members of Finisar board of directors and executive officers can be held liable in connection with the alleged Securities Laws violations in the lawsuit by investors who purchased FNSR stock between December 2, 2010 and March 8, 2011.
Finisar’s 12 month total revenue went from $418.55million to $629.88 from April 30, 2007 to April 30, 2010. Finisar was able to come out of a net loss of $48.91million, reported on April 30, 2007, to a net income of $14.13million reported on April 30, 2010.
Shares of Finisar (Public, NASDAQ:FNSR) traded during October 2010 were under $20 per share.
On December 1, 2010 Finisar announced record quarterly revenues and profitability for its second quarter ended October 31, 2010. Shares rose to almost $30 per share. Then on December 20, 2010, Finisar announced public offering of common stock. Finisar shares continued to increase to $43.22 on March 4, 2011.
On March 8, 2011, after the close of trading, Finisar announced its financial results for its third quarter ended January 30, 2011. Finisar said it had record revenues exceeding $1.0billion annual run-rate.
However, Finisar also disclosed that it expected adjusted earnings in the range of approximately $0.31 to $0.35 per share for the three months ending April 30, 2011. According to analysts, on average, they had been looking for profits of about $0.44 cents per share.
The company’s revenue forecast for the fourth quarter of $235 million to $250 million fell short of Wall Street expectations for $258.6 million, hence the investigation.
Finisar said in its March 8 announcement that it identified a slowdown in its business in China, a 10-day shutdown for Chinese New Year, and adjustments of inventory levels by some of its telecommunications customers as reasons for the shortfall.
Finisar shares plummeted from $40.04 on March 8, 2011 to $25 on March 9, 2011 and continued to decline to $22.58 on March 15, 2011. Recently however, the company made an upturn with FNSR shares traded above $25 per share.
