- Company Name
- Nutanix, Inc.
- Stock Symbol
- Class Period
- March 2, 2018 to February 28, 2019
- Motion Deadline
- May 28, 2019
- Northern District of California
The complaint charges Nutanix and certain of its officers with violations of the Securities Exchange Act of 1934. Nutanix provides a leading enterprise cloud platform that powers many of the world’s business applications and end-user services by providing software solutions that digitize traditional silos of enterprise computing.
The complaint alleges that during the Class Period, defendants made false and misleading statements and/or failed to disclose adverse information regarding Nutanix’s business and prospects. Specifically, contrary to their statements during the Class Period that Nutanix was making significant investments in sales and marketing while maintaining high profit margins, defendants had actually decreased Nutanix’s lead generation spending, which in turn “drove” higher margins and resulted in weak guidance. As a result of defendants’ false statements and/or omissions, the price of Nutanix common stock was artificially inflated during the Class Period to more than $64 per share, which enabled certain of Nutanix’s senior officers to sell their Nutanix stock at artificially inflated prices.
Then, on the February 28, 2019, defendants announced the Company’s financial results for the second quarter of fiscal 2019, revealing that despite their Class Period statements, Nutanix had held flat or decreased the “key” driver of its pipeline – lead generation. The Company reported third quarter guidance below analysts’ expectations and further acknowledged that “inadequate marketing spend for pipeline generation and slower than expected sales hiring” were the reasons for the weak guidance. As a result of these disclosures, the price of Nutanix common stock dropped $16.39 per share to close at $33.70 per share on March 1, 2019, a decline of over 32%.