- Company Name
- LogMeIn, Inc.
- Stock Symbol
- Class Period
- March 1, 2017 to July 26, 2018
- Motion Deadline
- October 19, 2018
- Central District of California
The complaint charges LogMeIn and certain of its officers with violations of the Securities Exchange Act of 1934. LogMeIn provides a portfolio of solutions for cloud-based communication and collaboration, identity and access, and customer engagement and support. On February 1, 2017, LogMeIn announce the completion of its merger with Citrix Systems’ GetGo, Inc. subsidiary, which consisted of Citrix Systems’ GoTo family of service offerings.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding LogMeIn’s business and prospects, including that LogMeIn had implemented business practices that had negatively impacted renewal rates for certain of its services, including among its GoTo clients. As a result of this information being withheld from the market, LogMeIn’s securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of more than $130 per share.
Then on July 26, 2018, after the market closed, LogMeIn held a conference call to discuss its second quarter 2018 earnings results. During the call, the Company’s CEO and CFO stated that the Company had implemented strategies that negatively impacted renewal rates of certain of its services, including among its GoTo clients. According to LogMeIn’s CEO, the Company’s communications and collaboration business failed to meet expectations during the quarter due to a “combination of imperfect execution and some hangover effects of last year’s merger with the GoTo business,” which “led to disappointing renewal rates.” He further stated that, “as we move[d] through the quarter, it became increasingly clear that some of the business practices we put in place following the merger were negatively impacting renewal rates. Aggressively moving customers from monthly to annual payments, changing business terms and conditions and barriers we created [with] the auto renewal process all contributed to friction for our customers and made us harder to do business with.” On this news, shares of LogMeIn fell $26.60 per share, or over 25%, to close at $77.85 per shares on July 27, 2018.