Scheller v. Nutanix, Inc. 5:19-cv-01651 — On March 29, 2019, investors sued Nutanix, Inc. (“Nutanix” or the “Company”) in United States District Court, Northern District of California. Plaintiffs in the NTNX class action allege that they acquired Nutanix stock at artificially inflated prices between March 2,2018 and February 28, 2019 (the “Class Period”). They are now seeking compensation for financial losses incurred upon public revelation of the Company’s alleged misconduct during that time. For more information on the NTNX Lawsuit, please contact us today!
Summary of the Allegations
The Company (NASDAQ: NTNX) engages in the provision of cloud computing software that facilitates IT management.
Specifically, the Company says its software does so by accommodating different “cloud operating environments” and providing a “single point of control to manage IT infrastructure and applications at any scale.” Its customers include businesses and organizations in numerous industries such as: automotive, energy, financial services, healthcare, manufacturing, retail, technology, and telecommunications.
Nutanix is incorporated in Delaware and its headquarters are located in San Jose, California. Founded in 2009, the Company now employs 4,700 people worldwide.
Summary of Facts
Nutanix and two of its senior officers (the “Individual Defendants”) are now accused of deceiving investors by lying and withholding critical information about the Company’s business practices during the Class Period.
Specifically, they are accused of omitting truthful information about the Company’s lead generation spending from SEC filings and related material. By knowingly or recklessly doing so, they allegedly caused Nutanix stock to trade at artificially inflated prices during the time in question.
The truth began to emerge in December 2018, when two Nutanix officers made millions by selling their Nutanix stock.
Then, after the market closed on February 28, 2019, Nutanix issued a press release announcing its financial results for the second fiscal of 2019. In it, one of the Individual Defendants said in pertinent part: “Looking ahead, our third quarter guidance reflects the impact of inadequate marketing spending for pipeline generation and slower than expected sales hiring. We took a critical look at these areas and have taken actions to address them.”
In an ensuing conference call held that same day, both Individual Defendants acknowledged that, contrary to statements made during the Class Period, “Nutanix had held flat or decreased the ‘key’ driver of pipeline – lead generation.”
History Repeating Itself
As alleged in the March 29 complaint, the Company and/or Individual Defendants repeatedly made false and misleading public statements during the Class Period.
For example, on a form filed with the SEC on March 15, 2018, one of the Individual Defendants said in pertinent part: “We plan to continue to invest in sales and marketing so that we can capitalize on our market opportunity, and as part of this, we intend to specifically expand our focus on opportunities with major accounts and large deals…”
On another form filed with the SEC on June 12, 2018, the Company stated in relevant part: “The increase in product revenue for the three and nine months ended April 30, 2018 reflects increased domestic and international demand for our solutions as we continue to penetrate and expand in global markets through increased sales and marketing activities.”
Finally, on a form filed with the SEC on September 24, 2018, the Individual Defendants stated in relevant part: “We intend to grow our base of end customers by increasing our investment in sales and marketing…”
Impact of the Alleged Fraud on Nutanix’s Stock Price and Market Capitalization
|Closing stock price prior to disclosures:
|Closing stock price the trading day after disclosures:
|One day stock price decrease (percentage) as a result of disclosures:
The following chart illustrates the stock price during the class period:
Actions You May Take
If you have purchased shares during the Class Period, you may join the class action as a lead plaintiff, remain a passive class member, or opt out of this litigation and pursue individual claims that may not be available to the class as a whole.
NOTE: The deadline to file for lead plaintiff in this class action is May 28, 2019. You must file an application to be appointed lead plaintiff prior to this deadline in order to be considered by the Court. Typically, the plaintiff or plaintiffs with the largest losses are appointed lead plaintiff.
In order to identify your potential exposure to the alleged fraud during the time in question, you may wish to perform an analysis of your transactions in Nutanix common stock using court approved loss calculation methods.
Recently Filed Cases
Listed below are recently filed securities class action cases being monitored by us, along with the class period and the deadline to file a motion to be appointed as the Lead Plaintiff in the action. Please contact us if you would like an LK report for any of these cases:
Levi & Korsinsky is a leading securities litigation firm with a hard-earned reputation for protecting investors’ rights and recovering losses arising from fraud, mismanagement and corporate abuse. With thirty attorneys and offices in New York, Connecticut, California and Washington D.C., the firm is able to litigate cases in various jurisdictions in the U.S., England, and in other international jurisdictions.
Levi & Korsinsky provides portfolio monitoring services for high-net worth investors and institutional clients. Our firm also assists investors in evaluating whether to opt-out of large securities class actions to pursue individual claims.