Masimo Corporation Securities Lawsuit Investigation

Shamis & Gentile P.A., a law firm that advocates for investors who are victims of securities fraud, is investigating potential claims against Masimo Corp. (MASI)

If you purchased Masimo Corporation (NASDAQ: MASI) prior to July 17, 2023, and still hold some shares today, you can seek corporate reforms, the return of funds back to the Company, and a court approved incentive award at absolutely no cost to you.

About Masimo

Masimo is a Delaware-incorporated company specializing in noninvasive patient monitoring technologies, including pulse oximetry, sensors (such as single-patient-use sensors), connectivity solutions, and hospital automation. The company also operates in the consumer sector, offering audio products and health-oriented wearables following its acquisition of Sound United in 2022.

Masimo’s business is sensitive to trends in hospital capital budgets, inpatient census, and inventory management, which can impact demand for its products.

What's being investigated

The investigation centers on potential breaches of fiduciary duty by Masimo’s board and officers in connection with alleged securities law violations. On July 17, 2023, Masimo announced preliminary second-quarter 2023 revenue results that fell significantly short of analyst expectations, citing delayed orders, lower sensor sales, and reduced hospital demand.

Following this announcement, Masimo and certain executives were named in a securities class action lawsuit. Plaintiffs allege that the company failed to disclose material information during the class period, which they contend may have violated federal securities laws.

Key timeline

• Feb. 28, 2023: Start of alleged securities class period. Investors allege this marks the beginning of the period during which material information may have been withheld.
• July 17, 2023: Masimo announces preliminary Q2 2023 revenue of $453 to $457 million, below the $540.87 million consensus estimate. Investors say this disclosure revealed previously undisclosed risks and led to a sharp stock decline.
• Aug. 8, 2023: Masimo reports actual Q2 2023 revenue of $455.3 million. Investors argue this confirmed the revenue shortfall.
• Aug. 22, 2023: Securities class actions filed. Plaintiffs allege misleading statements regarding sales pipeline and demand.

Why investors may be concerned

Investors and stockholder plaintiffs allege that Masimo’s board and officers may have failed to disclose material information about the company’s sales pipeline, demand for its products, and underlying risks. The complaint contends that the board may not have maintained adequate oversight systems to monitor mission-critical metrics, such as sensor demand and hospital census trends, before issuing or reaffirming financial guidance.

Further, concerns have been raised about whether the board acted on red flags, such as inventory stockpiling and declining hospital demand, and whether executive compensation was tied to revenue metrics during the period in question.

Your Rights and Next Steps

If you owned Masimo shares during the relevant period (February 28, 2023 to July 17, 2023) and continue to hold them, you may have the right to participate in a stockholder investigation.

Potential next steps:

• Requesting company documents under Delaware law (Section 220) to investigate potential breaches of fiduciary duty.
• Assessing whether to bring a derivative action on behalf of Masimo, seeking recovery for harm to the company.
• Monitoring ongoing securities class actions for developments that may affect your rights.

Shareholders in derivative actions typically must show they owned stock during the alleged misconduct and continue to hold it through the litigation. Derivative actions may seek monetary recovery for the company and governance reforms to address alleged oversight failures.

You May Be Entitled to Compensation

Securities investigations are time-sensitive. If you purchased or held Masimo shares and suffered losses during the relevant period, you may be eligible to join the investigation and help protect your rights. Participation may allow you to seek a court approved incentive award or governance reforms if a derivative action is filed and successful.

To join the investigation, complete the form below as soon as possible.