In Re FVC. COM Securities Litigation

MEMORANDUM AND ORDER

This consolidated securities fraud class action arises from defendant FVC.COM’s revision of its unaudited financial statements for the quarter ending December 31, 1998. As a result of the change, FVC. Com reported $7 million less in revenue for the fourth quarter 1998 than it had previously reported and the value of its stock plunged by nearly 60 percent.

Now before the Court is defendants’ motion to dismiss the Consolidated Complaint (“Complaint”). After carefully considering the pleadings filed by parties, and having had the benefit of oral argument on Feb ruary 11, 2000, the motion to dismiss is GRANTED without leave to amend.

BACKGROUND

A. Factual Allegations

Defendant FVC.COM (“FVC”) is the leading provider of broad band network video applications. Complaint ¶ 12. FVC was founded in 1993 by defendants Ralph Ungermann (“Ungermann”) and Allwyn Sequeira (“Sequeira”) and in April 1998 it completed an initial public offering (“IPO”) of stock. Id. ¶¶ 5,7,14.

FVC’s IPO prospectus disclosed that its future performance would depend in large part on the sales of its products through original equipment manufacturers (“OEMs”), in particular, through Bay…