NEW YORK, May 11, 2015 (GLOBE NEWSWIRE) -- Gainey McKenna & Egleston announces that a class action lawsuit has been filed in the United States District Court for the District of Massachusetts on behalf of all persons or entities that purchased the securities of Endurance International Group Holdings, Inc. (“Endurance” or the “Company”) (Nasdaq:EIGI) between November 4, 2014 and April 27, 2015, inclusive (the “Class Period”), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers (the “Complaint”).
Endurance International Group Holdings, Inc., together with its subsidiaries, states that it provides cloud-based platform solutions for small-and medium-sized businesses.
The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements, and failed to disclose materially negative facts, about the Company's business prospects. Specifically, the Complaint alleges that the defendants concealed from the investing public that: (1) the Company overstated its average revenue per subscriber ("ARPS") and organic growth rate; (2) the Company engaged in irregular accounting practices related to its international business; and (3) as a result, Defendants' statements about Endurance's business, operations, and prospects were false and misleading and/or lacked a reasonable basis. As a result of defendants' alleged false and misleading statements, the Company's stock traded at artificially inflated prices during the Class Period.
According to the Complaint, on April 28, 2015, research firm Gotham City Research LLC published a report alleging, among other things, that 40% to 100% of Endurance's reported profits were suspect and the Company's normalized profits would be insufficient to cover its interest expenses. The report alleged that the Company used related parties to inflate earnings, and that transactions with related entities have accounted for at least 16.5% of the Company's 2012-2014 Earnings Before Interest, Taxes, Depreciation and Amortization. The report also alleged that the Company's reported organic growth was overstated and that 2014 ARPS had actually declined 13% when the Company's 10-K claimed that ARPS had grown 11%.
On this news, shares in Endurance dropped over 10%, closing at $19.70 per share on April 28, 2015, on heavy trading volume.
If you wish to serve as lead plaintiff, you must move the Court no later than July 3, 2015. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. If you wish to join the litigation, or to discuss your rights or interests regarding this class action, please contact Thomas J. McKenna, Esq. or Gregory M. Egleston, Esq. of Gainey McKenna & Egleston at (212) 983-1300, or via e-mail at tjmckenna@gme-law.com or gegleston@gme-law.com.
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