Legal Action Unleashed
Investors in Outset Medical, Inc. were rattled by recent legal developments as the Law Offices of Frank R. Cruz filed a class action lawsuit against the company. The lawsuit, initiated in the United States District Court for the Northern District of California, pertains to securities fraud allegations surrounding shares of Outset Medical (NASDAQ:OM) purchased or acquired between the period August 1, 2022, and August 7, 2024.
Stock Tumult
In a series of tumultuous events, Outset Medical’s stock took a beating with significant price drops after key announcements. The company faced challenges when, on July 7, 2023, it disclosed receiving a Warning Letter from the FDA. Another blow came on August 2, 2023, when Outset Medical announced a “Shipment Pause of TabloCart with Prefiltration Pending 510(k) Clearance.” Subsequently, on October 12, 2023, revenue growth saw a substantial impact following the FDA warning letter.
However, the most severe plunge occurred on August 7, 2024, when Outset Medical released disappointing second-quarter financial results. The company not only missed consensus estimates but also revised its full-year 2024 revenue guidance downwards by a significant margin. This triggered a staggering 68.53% drop in the company’s share price, closing at a mere $1.07 per share.
Allegations of Deception
The heart of the class action lawsuit lies in the allegations that Outset Medical and its executives misled investors by making false or misleading statements during the Class Period. The company reportedly failed to disclose critical information regarding the marketing of its Tablo products, leading to potential risks due to FDA regulations. The lawsuit contends that these non-disclosures significantly impacted the company’s revenue growth prospects and misled investors about the true state of the business.
Legal Remedies
Investors affected by the alleged securities fraud have been urged to take action within 60 days from the notice to possibly secure the role of lead plaintiff in the class action. This development could have significant implications for those who purchased Outset Medical securities during the Class Period. Frank R. Cruz, of The Law Offices of Frank R. Cruz, has been identified as a key contact for investors seeking more information or legal advice regarding the matter.
As the legal proceedings unfold, the future remains uncertain for Outset Medical as it grapples with the fallout from the securities fraud lawsuit amidst a backdrop of financial turbulence and investor unease.