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Class Action Filed After OCZ Technology (OCZ) Delays Earnings, Slashes Estimates
A class action complaint filed against OCZ Technology Group, Inc. (NASDAQ: OCZ) alleges that the California-based SSD technology company improperly accounted for customer incentive programs and lacked basis for its optimistic financial projections. The lawsuit was filed in the Central District of California on behalf of those who purchased OCZ shares between July 10, 2012 and October 10, 2012.
On October 10, 2012, OCZ shares fell 40% after the company announced a delay in filing its financial results for the second quarter of 2013, in order to provide enough time to assess its quarterly revenue, which will be less than its previous guidance announced on September 5, 2012. OCZ said the shortfall was due to the “impact of customer incentive programs,” which includes product rebates and price adjustments.
Revenue for the quarter ended August 31 will be “materially lower” than the $110 million to $120 million estimate announced on September 5, the company said in a pres release. The company expects negative gross margins and a significant net loss for the quarter.
OCZ has commenced an internal review to determine if the company used proper accounting treatments for its rebates and whether inventory needs to be written down. Ralph Schmitt, chief executive officer, said the company’s cash position had declined and it had accessed a credit facility but he declined to give further details.
If you purchased shares of OCZ Technology between July 10, 2012 and October 10, 2012, you may file a motion with the court no later than December 10, 2012, and request that the court appoint you as lead plaintiff. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. To be appointed lead plaintiff, the court must decide that your claim is typical of the claims of other class members and that you will adequately represent the class. Your share in any recovery will not be enhanced or diminished by your decision of whether or not to serve as a lead plaintiff. You can recover as an absent class member without moving for lead plaintiff. The action discussed here was not filed by Milberg.
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