ViewRay, Inc. (VRAY) Accused of Misleading Shareholders
According to the class action complaint for alleged violations of the Securities Exchange Act of 1934, in March 2019 ViewRay touted its increase in sales and revenue for fiscal year 2018 and informed that it was “well positioned to drive further growth, therapy adoption, and extend its innovation lead” for fiscal year 2019. ViewRay announced a 2019 full year guidance in the range of $111-$124 million. In later reports, ViewRay assured investors ” sales pipeline growing as anticipated,” but in reality, ViewRay was experiencing a decline in demand due to changes in Medicare reimbursements, and its reported backlog was overstated due to the inclusion of orders with insufficient surety. As a result of these issues, in August 2019, ViewRay reported a much higher net loss than it had previously represented and a significant decline in its backlog. ViewRay then slashed its full year 2019 revenue guidance from $111-$124 million to $80-$90 million, citing the newness of its U.S. sales team and the U.S. Health & Human Services’ new oncology-alternative payment model as reasons. On this news, ViewRay common stock declined more than 50% to close at $3.10 a share, and has yet to recover.
