Wasson v. LogMeIn, Inc., et al 2:18-cv-07285 — On August 20, 2018, investors sued LogMeIn, Inc. (“LogMeIn” or the “Company”) in United States District Court, Central District of California. Plaintiffs in the LOGM class action allege that they acquired LogMeIn stock at artificially inflated prices between March 1, 2017 and July 26, 2018 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For any additional information on the LOGM Lawsuit, or to join the class action, please contact us today!

Summary of the Allegations

Company Background

According to its website, the Company (NASDAQ:LOGM) provides products that simplify “how people interact with each other and the world around them.”

Specifically, LogMeIn provides “a portfolio of cloud-based communication and collaboration, identity and access, and customer engagement and support solutions.” Its products include GOTOMEETING, GOTOWEBINAR, OPENVOICE, GOTOASSIST and LASTPASS.

LogMeIn also claims that its platform supports 2 million daily users, 200 million customer engagements and five billion voice minutes per year.

The Company is incorporated in Delaware and based in Goleta, California.

Summary of Facts

LogMeIn and two of its senior officers and/or directors (the “Individual Defendants”) are now accused of deceiving investors by lying and withholding critical information about the Company’s business practices during the Class Period.

Specifically, they are accused of omitting truthful information about the effect of LogMeIn’s business practices on some of its renewal rates from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused LogMeIn stock to trade at artificially inflated prices during the time in question.

The truth emerged during an earnings call held by the Company after the market closed on July 26, 2018. During the call, which the Company held to report is second quarter 2018 earnings, the Individual Defendants revealed that the Company “implemented strategies which negatively impacted renewal rates of certain of its services, including amongst its GoTo clients.”

A closer look…

As alleged in the August 20 complaint, the Company repeatedly made false and misleading public statements during the Class Period.

For example on a form filed with the SEC on March 1, 2017, LogMeIn said in relevant part: “Customers have no obligation to renew their subscriptions after their subscription period expires, and these subscriptions may not be renewed on the same or on more profitable terms. As a result, our ability to grow depends in part on subscription renewals.”

Then, on another form filed with the SEC on February 20, 2018, the Company also said in pertinent part: “As we continue to integrate the GoTo Business, we will monitor and assess our renewal rate calculation and methodology to ensure that it is appropriate for the combined company.”

What the Company didn’t divulge until the July 26 earnings call was that some of its strategies following its 2017 merger with the GoTo business had completely backfired.

During the call, one of the Individual Defendants finally acknowledged the extent of the damage, saying in pertinent part: “As we move [sic] 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 [sic] the auto renewal process all contributed to friction for our customers and made us harder to do business with.”

Impact of the Alleged Fraud on LogMeIn’s Stock Price and Market Capitalization

The following chart illustrates the stock price during the class period:

Actions You May Take

If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.

NOTE: The deadline to file for lead plaintiff in this class action is October 19, 2018. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.

In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in LogMeIn common stock using court approved loss calculation methods.

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Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action.  Please contact us if you would like an LK report for any of these cases:

About Us

Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse.  With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.

Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients.  Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.

For additional information about this case or our institutional services, please contact us.