- Company Name
- Conduent Inc.
- Stock Symbol
- Class Period
- February 21, 2018 to November 6, 2018
- Motion Deadline
- May 7, 2019
- District of New Jersey
The complaint charges Conduent and certain of its officers with violations of the Securities Exchange Act of 1934. Conduent is a digital interactions company that provides business process services and expertise in transaction-intensive processing, analytics and automation. The Company was formed when a collection of businesses within Xerox Corporation was spun off in December 2016. Throughout 2017, defendants repeatedly represented that Conduent was going through a one-year transformation after its formation in 2016 and would exit as a unified business with a cohesive information technology.
The complaint alleges that, despite defendants’ representations during the Class Period that the Company had “made impressive progress towards transforming [itself] in almost every dimension, with every function and unit contributing in some way,” which led to a two-day stock price increase of $2.29 per share (or 14.3%), on February 21-22, 2018, in fact, Conduent remained mired in inadequate technology and third-party agreements that it had been saddled with upon its divestiture from Xerox. As a result of this information being withheld from the market, the price of Conduent stock was artificially inflated during the Class Period to a high of more than $23 per share.
Then on November 7, 2018, defendants acknowledged that Conduent had suffered reduced third quarter and projected fourth quarter operating results caused by “continued suboptimal performance from an inherited legacy technology vendor. The performance issue stem[s] from the vendor’s inability to deliver on service level agreements, lack of responsiveness to Conduent’s needs, and [a] poorly structured contract which [the Company] inherited.” In addition, according to the Company, an “outdated and historically under-invested legacy IT infrastructure ha[d] caused major disruptions to [its] operations and impacted clients and delivery performance.” On this news, the price of Conduent common stock fell $5.60 per share to close at $13.62 per share on November 7, 2018, a decline of more than 29%.