- Company Name
- Box, Inc.
- Stock Symbol
- Class Period
- November 28, 2018 to June 3, 2019
- Motion Deadline
- August 5, 2019
- Northern District of California
The complaint charges Box and certain of its officers with violations of the Securities Exchange Act of 1934. Box provides a cloud content management platform that enables organizations of various sizes to manage and share their content from anywhere or any device. The Company serves financial services, government, healthcare and life sciences, media and entertainment, retail, education, and nonprofit industries in the United States and internationally.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s business and prospects. Specifically, defendants failed to disclose that the Company was unable to close certain large deals during the Class Period, which would have a material impact on the Company’s revenue. As a result of this information being withheld from the market, Box securities traded at artificially inflated prices during the Class Period, with its stock price reaching a high of nearly $25 per share. While the prices of Box securities were artificially inflated, the Company’s CFO and Chairman collectively sold more than 267,000 shares of their personal Box common stock for proceeds of more than $5.5 million.
On February 27, 2019, the Company reported its fourth quarter revenue, which fell below investors’ expectations, and issued fiscal 2020 revenue guidance of $700 million to $704 million. The defendants blamed the disappointing fourth quarter revenue on “underperformance in EMEA and longer sales cycles for some seven-figure deals.” On this news, the Company’s share price fell $4.64 per share, or nearly 19%, to close at $20.24 per share on February 28, 2019.
Then on June 3, 2019, after the market closed, the Company announced that it was lowering its fiscal 2020 revenue outlook from its previous guidance of $700 million to $704 million, issued just three months earlier, to $688 million to $692 million, again citing longer sales cycles for its larger deals. On this news, the Company’s share price fell $1.30 per share, or more than 7%, to close at $17.18 per share on June 4, 2019.