Class Action Lawsuit Against Cambium Networks Corp. (NASDAQ:CMBM)

A class action lawsuit has been filed against Cambium Networks Corp. (NASDAQ: CMBM) on May 22, 2024. The plaintiffs (shareholders) alleged that they purchased CMBM shares at artificially inflated prices between May 8, 2023 and January 18, 2024 (the lawsuit period) and are now seeking compensation for their financial losses. Investors who purchased Cambium Networks shares during this period can click here to learn more about participating in the lawsuit.

Cambium Networks is a wireless communications services provider. The company designs, develops and manufactures multi-gigabit broadband and Wi-Fi infrastructure for commercial, residential, defense and municipal applications worldwide.

Plaintiffs allege that Cambium Networks and three of its current and/or former officers (Individual Defendants) deceived investors by lying and withholding important information about the Company’s business practices and prospects during the Class Period. Specifically, Defendants are accused of omitting truthful information about inventory buildup and incidental matters from SEC filings and similar materials.

The truth became clear in a series of events between August 1, 2023, and January 18, 2024. Importantly, on January 18, after the market closed, Cambium Networks released its preliminary results for the fourth quarter of fiscal 2023, in which it cut its revenue for the quarter to $40 million from the previous guidance of $40 million to $45 million. The company cited “aggressive discounting of enterprise products to reduce excess channel inventory” as the reason for the shortfall.

In addition, the company stated that its gross margin would fall below the lower range of guidance due to write-offs on excess and obsolete inventory. At the same time, CMBM announced that its CFO would resign from his position due to the above-mentioned failures, effective February 2, 2024.

According to the class action lawsuit, Cambium Networks caused its shares to trade at artificially inflated prices by knowingly and negligently misleading investors about the company’s business practices during the Class Period.

In particular, CMBM’s share price has fallen by over 80% in the past year, resulting in massive losses in shareholder returns.