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id: 689, Created by Stan Vick, Scout
Edgio, Inc. (EGIO) Case on Financial Misrepresentations
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- Edgio announced the restatement of its previous financial statements.
- Restatements would result in a reduction in revenue.
- $EGIO fell 15.5%, injuring investors.
- Investors suspect Edgio & Its Leaders of misleading.
On March 13, 2023, Edgio announced that it will restate its previously issued financial statements for the years ended December 31, 2021, and 2020, as well as the quarterly reports for fiscal 2022 and 2021, because its audit committee “identified an error in the Company’s historic accounting treatment of Edgio’s Open Edge solution.”
The Company anticipated the restatements would result in a “reduction to revenue of up to approximately $23.0 million for the nine-month period ended September 30, 2022, up to approximately $16.7 million for the twelve-month period ended December 31, 2021, and up to approximately $6.6 million for the twelve-month period ended December 31, 2020.” As a result, the Company stated that it would be unable to file its annual report on time.
On this news, the $EGIO price fell 15.5%, thereby injuring investors.
Taking all appeared facts into account, Investors have reasons to suspect Edgio, Its Leaders & Service Providers of misleading and financial misrepresentations, specifically, failure to disclose to investors:
- that the sale of Open Edge equipment should be accounted as financing leases;
- that there were material weaknesses in the Company’s internal controls over financial reporting related to Open Edge transactions;
- that, as a result, the Company’s revenue had been overstated in certain periods; and
- that, as a result of the foregoing, Defendant’s positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Failure to Disclose,
Shock Event Date
13 March 2023
25 April 2023
Lead Plaintiff Deadline
26 June 2023
Hon. Diane J. Humetewa