A class action lawsuit has been filed in the United States District Court for the Northern District of California on behalf of all persons or entities who purchased or otherwise acquired the common stock of Pacific Biosciences of California, Inc.(Nasdaq: PACB) between October 27, 2010, and September 20, 2011, inclusive (the “Class Period”) alleging violations of the Securities Exchange Act of 1934 (the “Complaint”).
The Complaint asserts that, during the Class Period, defendants failed to disclose material adverse facts regarding the Company’s overall operational and financial condition that were caused by significant problems with its third generation human genome sequencing technology. Defendants’ failure to disclose these problems rendered their statements concerning the Company’s financial condition and future prospects materially false and misleading which, in turn, artificially inflated the price of PacBio common stock during the Class Period.
On August 5, 2010, JP Morgan downgraded its rating of PacBio due to a significantly lower projection of orders in 2012. It projected that PacBio would not become profitable until 2015, and it lowered its target price for PacBio shares down to $10. That day, August 5, 2011, shares of PacBio closed at $6.50, a decline of $3.40, or over 34%, on trading volume that was over two times greater than the previous day’s. The next trading day, August 8, 2011, PacBio closed at $5.60, a decline of an additional $0.90, again on very heavy trading volume. In two trading days, PacBio stock lost $4.30, or over 43% of its value.
On September 20, 2011, after the close of the market, PacBio announced it was reducing its workforce by approximately 130 employees, or approximately 28% of its total workforce. The Company thus admitted what was apparent to its analysts: its products were not selling at the rate it had projected. Moreover, with the cuts to its research and development department, the prospects for needed improvement in the Company’s new and still developing technology were dim. The market reacted immediately. The Company’s shares, which closed at $5.56 on September 20, 2011, lost $1.31 to close at $4.25 on September 21, 2011, a decline of almost 24%, on trading volume that was nearly nine times greater than the previous day’s.
If you are a current shareholder and/or purchased stock between October 27, 2010, and September 20, 2011, and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.