Kehoe Law Firm, P.C. announces that class action lawsuits were filed in United States District Court for the Northern District of California against Pivotal Software, Inc. (“Pivotal” or the “Company”) (NYSE: PVTL) and certain of its officers.
The class actions seek to recover damages on behalf of classes consisting of all persons and entities who purchased, or otherwise acquired, i) Pivotal common stock pursuant or traceable to the registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with Pivotal’s April 2018 initial public offering (“IPO”) and/or ii) Pivotal securities between April 24, 2018 and June 4, 2019, both dates inclusive (the “Class Period”).
If you purchased Pivotal securities pursuant to the IPO and/or during the Class Period and suffered damages, please click Join a Securities Class Action or contact either John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], or Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], to learn more about the class action lawsuit. Pivotal investors have until August 20, 2019 to move the Court to serve as lead plaintiff.
In April 2018, Pivotal commenced its IPO, issuing over 42 million shares of Pivotal common stock to the investing public at $15.00 per share, all pursuant to the Registration Statement, raising more than $638 million in gross proceeds.
One of the class action complaints alleges that the Registration Statement was false and misleading and omitted to state material adverse facts. Specifically, Defendants failed to disclose to investors: (1) that the Company’s Pivotal Application Service (“PAS”) product was not compatible with the industry-standard Kubernetes platform; (2) that, as a result, the PAS product faced reduced demand as the industry shifted away from the outdated product; (3) that the Company’s Pivotal Container Service (“PKS”) product, though compatible with Kubernetes, was severely limited and could not meet large enterprises’ needs; (4) that, as a result, Pivotal could not adequately meet industry demand for a Kubernetes-compatible product that met customers’ wide range of needs; (5) that, as a result of the foregoing, Pivotal was experiencing deferred sales, lengthening sales cycles, and diminished growth; (6) that, as a result, Pivotal would be forced to reengineer its flagship PAS product to be compatible with Kubernetes; and (7) that, as a result of the foregoing, the Pivotal Defendants’ positive statements about Pivotal’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Post-market, on June 4, 2019, Pivotal reported its “First Quarter Fiscal Year 2020 Financial Results,” advising, among other things, that “. . . sales execution and a complex technology landscape impacted the quarter.”
On June 5, 2019, MarketWatch reported that
Wedbush analyst Daniel Ives called the quarter a “train wreck” and dubbed Pivotal’s . . . deferred revenue and billings numbers “disastrous” in downgrading the shares . . . .”
‘While management blamed a “complex technology landscape,” which negatively impacted the quarter, it is clear . . . that this management team does not have a handle on the underlying issues negatively impacting its sales cycles and the activity in the field which give us concern that this quarter will be the start of some “dark days ahead” for Pivotal (and its investors),’ wrote Ives, who cut his rating on the [Pivotal] stock to neutral from outperform and lowered his target to $15 from $26. [Emphasis added.]
On this news, Pivotal’s stock price dropped $7.65 per share, or more than 40%, to close at $10.89 per share on June 5, 2019, thereby injuring investors.