According to the Complaint, the Company issued a press release on January 26, 2012 detailing their Q4 results for 2011 along with full-year guidance for 2012. In particular, the Company expressed that it expected another year of very strong top-line and bottom line growth in 2012. This belief was echoed in their April 26, 2012 press release reporting the Company’s financial results for Q1 of 2012.
However, on July 26, 2012, the Company issued a press release which now stated otherwise. In this release, which also contained Green Dot’s Q2 financial results, the Company updated its guidance for 2012. Citing a “greater level of uncertainty going forward in our business as the prepaid marketplace continues to evolve,” the Company decided to lower its guidance for the remainder of the year. The Company also pointed to a lack of historical data on how sales will be affected by the sale of competitive GPR products by their retailers. On this news, shares of the Company declined over 61%, closing at $9.06 per share on July 27, 2012, on extraordinary high volume of over 18 million shares.
If you can be sued for this how can anyone be public? Is it not crazy to think that Greendot truly thought the business would be strong in 2012 and then market conditions that were outside of their control changed?