LifeLock 2013 Annual Report Download - page 32
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The trading price of our common stock has been, and is likely to continue to be, volatile. In addition to the risk factors described in this section and
elsewhere in this Annual Report on Form 10-K, factors that may cause the price of our common stock to fluctuate include the following:
•actual or anticipated fluctuations in our quarterly or annual financial results;
•the financial guidance we may provide to the public, any changes in such guidance, or our failure to meet such guidance;
•the failure of industry or securities analysts to maintain coverage of our company, changes in financial estimates by any industry or securities
analysts that follow our company, or our failure to meet such estimates;
•various market factors or perceived market factors, including rumors, whether or not correct, involving us, our customers, our strategic partners,
or our competitors;
•sales, or anticipated sales, of large blocks of our stock;
•short selling of our common stock by investors;
•additions or departures of key personnel;
•announcements of technological innovations by us or by our competitors;
•introductions of new services or new pricing policies by us or by our competitors;
•regulatory or political developments;
•litigation and governmental or regulatory investigations;
•acquisitions or strategic alliances by us or by our competitors; and
•general economic, political, and financial market conditions or events.
Furthermore, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of
equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These
and other factors may cause the market price and demand for our common stock to fluctuate substantially, which may limit or prevent i nvestors from readily
selling their shares of common stock and may otherwise negatively affect the price or liquidity of our common stock. In addition, in the past, when the market
price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the stock. If
any of our stockholders were to bring a lawsuit against us, we could incur substantial costs defending the lawsuit or paying for settlements or damages. Such
a lawsuit could also divert the time and attention of our management from our business.
The market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market, and even the
perception that these sales could occur may depress the market price. As of December 31, 2013, we had approximately 91.4 million shares of common stock
outstanding. These shares may be sold in the public market, subject to prior registration or qualification for an exemption from registration, including, in the
case of shares held by affiliates, compliance with the volume restrictions of Rule 144. In addition, shares issued or issuable upon the exercise of options and
warrants are also eligible for sale. Sales of stock by these stockholders could have a material adverse effect on the trading price of our common stock.
Former holders of our preferred stock are entitled, under contracts providing for registration rights, to require us to register our securities owned by
them for public sale. Registration of these shares under the Securities Act would resul t in the shares becoming freely tradable without restriction under the
Securities Act, except for shares held by our affiliates. Any sales of securities by these stockholders could have a material adverse effect on the trading price of
our common stock.
Sales of common stock as restrictions end or pursuant to registration rights may make it more difficult for us to sell equity securities in the future at a
time and at a price that we deem appropriate.
We intend to issue additional securities pursuant to our equity incentive plans and may issue equity or convertible securities in the future. To the extent
we do so, our stockholders may experience substantial dilution. We may sell common stock, convertible securities, or other equity securities in o ne or more
transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities, or other equity securities in more than
one transaction, investors may be materially diluted by subsequent sales and new investors could gain rights superior to our existing stockholders.
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