Domo, Inc. Class Action Lawsuit
- Company Name
- Domo, Inc.
- Stock Symbol
- Class Period
- June 28, 2018 and September 5, 2019, including purchasers pursuant to the Company’s initial public offering on or about June 29, 2018
- Motion Deadline
- December 16, 2019
- District of Utah
On October 17, 2019, the Domo, Inc. class action lawsuit was filed charging Domo and certain of its officers and directors with violations of the Securities Exchange Act of 1934 and/or the Securities Act of 1933. The Domo class action lawsuit was commenced in the District of Utah on behalf of purchasers of Domo securities between June 28, 2018 and September 5, 2019 (the “Class Period”) or purchasers of Domo common stock pursuant to Domo’s initial public offering on or about June 29, 2018 (“IPO”) and is captioned Patton v. Domo Inc., 2:19-cv-00781.
Domo operates a cloud-based platform in the United States that purportedly digitally connects everyone from the chief executive officer to the frontline employee with the people, data, and systems in an organization, giving them access to real-time data and insights and allowing them to manage business from smartphones.
On June 1, 2018, Domo filed a registration statement on Form S-1 with the SEC in connection with its IPO, which, after amendment, was declared effective on June 28, 2018 (the “Registration Statement”). On June 29, 2018, Domo filed a prospectus in connection with the IPO on Form 424B4, which incorporated and formed part of the Registration Statement (collectively, the “Offering Documents”). On or about June 29, 2018, pursuant to the IPO, Domo’s Class B common stock began trading on the Nasdaq Global Market. On July 3, 2018, Domo closed the IPO, in which Domo issued and sold 10.58 million shares of Class B common stock at $21.00 per share.
The Domo class action lawsuit alleges that throughout the Class Period and in the Offering Documents for the IPO, defendants made materially false and misleading statements regarding Domo’s business, operations, and prospects. Specifically, defendants failed to disclose that Domo was experiencing weakness in its enterprise and international businesses, that Domo’s billings growth had dramatically slowed, and that all of the foregoing was reasonably likely to have a material negative impact on Domo’s financial results. As a result of this information being withheld from the market, defendants were able to complete the IPO of 10.58 million shares of Domo stock at $21 per share, and the price of Domo stock was artificially inflated to nearly $45 per share during the Class Period.
On September 5, 2019, after the market closed, Domo announced its financial results for the second quarter of 2020. Although Domo reported positive earnings news, Domo also provided guidance for the third quarter and full 2020 fiscal year that fell short of market expectations. Specifically, defendants revealed to investors that they expected third quarter revenue of $41.5-$42.5 million, versus a consensus of $44.2 million, and a loss of $1.04-$1.00 per share, versus a consensus of a loss of $0.91 per share. Additionally, defendants revealed expectations of full year 2020 revenue of $168-$169 million, versus a consensus of $173.7 million, and a loss of $4.10-$4.00 per share, versus a consensus of a loss of $3.82 per share.
Then, on September 6, 2019, before the market opened, JMP Securities dropped its Domo price target by $10.00, to $37.00 per share, citing the “disappointing” report and guidance, weakness in Domo’s enterprise and international businesses, and billings growth that was about half of what was expected. On this news, the price of Domo stock fell $9.44 per share, or more than 37%, to close at $15.77 per share, or nearly 25% below the IPO price of $21.00, on September 6, 2019.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Domo securities during the Class Period or common stock pursuant to Domo’s IPO to seek appointment as lead plaintiff in the Domo class action lawsuit. A lead plaintiff will act on behalf of all other class members in directing the Domo class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Domo class action lawsuit. An investor’s ability to share in any potential future recovery of the Domo class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the Domo class action lawsuit or have questions concerning your rights regarding the Domo class action lawsuit, please provide your information here or contact counsel, Brian E. Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. Lead plaintiff motions for the Domo class action lawsuit must be filed with the court no later than December 16, 2019.
Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation. With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For six consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.