… Gainey McKenna & Egleston …

Gainey McKenna & Egleston announces that a class action lawsuit has been filed against Nimble Storage, Inc. in the United District Court for the Northern District of California on behalf of a class consisting of all persons or entities who purchased securities between May 27, 2015 and November 19, 2015, inclusive.

This class action seeks to recover damages against defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.

The complaint alleges that during the class period, defendants issued false and misleading statements regarding the company’s business and prospects, including that Nimble Storage was being negatively impacted by intense competition from well-entrenched, large competitors who were slashing prices in order to maintain market share; that Nimble Storage had made a conscious decision to focus its sales and marketing efforts towards the large enterprises market and to reduce sales efforts in the U.S. commercial market; and that due to this change in sales strategy and the intense price competition, Nimble Storage was losing sales in both sales channels.

The complaint alleges that as a result of these false statements and/or omissions, Nimble Storage stock traded at artificially inflated prices during the class period, reaching as high as $31.60 per share, and enabling certain company insiders to collectively sell more than 1.12 million shares of their personally held Nimble Storage common stock at artificially inflated prices for gross proceeds in excess of $31.4 million.

On November 19, 2015, Nimble Storage announced fiscal 2016 third quarter financial results, reporting total revenue of $80.7 million, non-GAAP gross margin of 66.9%, a non-GAAP operating loss of $10.8 million, or negative 13% of revenue, and a GAAP net loss of $28.6 million, or $0.36 per basic and diluted share. Defendants attributed the disappointing results to the shift in the company’s “investment from commercial to enterprise business,” which “impacted [the company’s] commercial revenue growth more than . . . anticipated,” and its “enterprise investments . . . taking longer to become fully productive.”  

On this news, the price of Nimble Storage common stock fell $10.34 per share, or 51%, to close at $10.05 per share on November 20, 2015.