Tech Data Corporation (Nasdaq: TECD)
A class action has been commenced on behalf of purchasers of Tech Data Corporation (Nasdaq: TECD) common stock between June 1, 2017 and August 31, 2017 (the “Class Period”).
The complaint charges Tech Data and certain of its officers with violations of the Securities Exchange Act of 1934. Tech Data is a wholesale distributor of technology products. The Company identifies itself as a link in the technology supply chain that brings products from technology vendors to market and provides its customers with logistical capabilities and services.
From 1989 to 2012, Tech Data expanded through multiple acquisitions of distribution companies in both America and Europe. On February 27, 2017, Tech Data completed the acquisition of the Technology Solutions (“TS”) business of Avnet, Inc. for an aggregate purchase price of approximately $2.672 billion. The TS acquisition was aimed at diversifying Tech Data’s end-to-end solutions, deepening its value added capabilities, and balancing its solutions portfolio.
The complaint alleges that throughout the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding the Company’s business and financial condition, including that the Company was experiencing execution and operational issues that were impacting the Company’s financial performance, and, as a consequence, the Company would not achieve its previously announced guidance. As a result of these false statements and/or omissions, the price of Tech Data stock was artificially inflated, with its shares trading at prices of more than $110 per share during the Class Period.
Then on August 31, 2017, Tech Data announced its results for the second fiscal quarter ended July 31, 2017, reporting non-GAAP earnings per share of $1.74, well below the $1.95-$2.08 range defendants had led the market to expect. During the conference call to discuss the second quarter results, defendant Robert Dutkowsky, the Company’s Chief Executive Officer, disclosed that the Company had been experiencing execution and operational issues, including pricing issues, rebate issues and issues related to the integration of the TS business, which had “impacted [Tech Data] in this quarter in a way that was much larger than we anticipated.”
As a result of this news, the price of Tech Data shares fell $22.83 per share to close at $87.46 per share on August 31, 2017, a decline of nearly 21%.
If you are a current shareholder and purchased stock between June 1, 2017 and August 31, 2017, and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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