Robbins Arroyo LLP: Gogo Inc. (GOGO) Misled Shareholders According to a Recently Filed Class Action

June 29, 2018

 

Shareholder rights law firm Robbins Arroyo LLP announces that purchasers of Gogo Inc. (NasdaqGS: GOGO) have filed a class action complaint against the company's officers and directors for alleged violations of the Securities Exchange Act of 1934 between February 27, 2017 and May 7, 2018. Gogo, through its subsidiaries, provides inflight broadband connectivity and wireless entertainment services to the aviation industry in the United States and internationally. Gogo’s 2Ku system is an antenna and satellite-based system, which provides additional bandwidth and improved speeds for wi-fi on airplanes.

Gogo Accused of Downplaying Problems with Its Antennas

According to the complaint, Gogo's 2Ku antenna suffered from manufacturing, software, and reliability issues and required replacement due to de-icing fluids from planes infiltrating the 2Ku system. As a result of the many problems with the 2Ku antenna, Gogo would not be able to meet its previously issued 2018 guidance. On May 4, 2018, Gogo discussed the financial impact of the de-icing issues, revealing that adjusted EBITDA is expected to be below the previously provided range of $75 million to $100 million due to increased costs and lost revenue related to the 2Ku implementation challenges. Then, on May 7, 2018, Moody's downgraded Gogo's credit rating, citing Gogo's weak operating performance in its two commercial aviation segments, and predicting that operating metrics would remain weak in 2018. Since Gogo's troubles began to be made public, Gogo's stock has fallen 41% to close at $4.88 on June 29, 2018.