Tufin Software Technologies Ltd. Class Action Lawsuit
- Company Name
- Tufin Software Technologies Ltd.
- Stock Symbol
- Class Period
- Purchasers of Tufin stock pursuant to Tufin’s April 11, 2019 initial public offering and its December 5, 2019 secondary public offering
- Southern District of New York
The Tufin Software Technologies Ltd. class action lawsuit charges Tufin Software, certain of its officers and directors, and the underwriters of its April 11, 2019 initial public offering (“IPO”) and its December 5, 2019 secondary public offering (the “SPO”) with violations of the Securities Act of 1933. Filed in the Southern District of New York and commenced on July 21, 2020, the Tufin Software class action lawsuit seeks to represent purchasers of Tufin stock pursuant to Tufin’s IPO and/or SPO and is captioned Ellison v. Tufin Software Technologies Ltd., No. 20-cv-05646.
Tufin Software is an Israeli company that develops, markets, and sells software and cloud-based security solutions primarily in the United States, Europe, and Asia. On March 6, 2019, Tufin Software filed a registration statement with the U.S. Securities and Exchange Commission (“SEC”) which, after several amendments, was declared effective on April 10, 2019. The following day, Tufin Software filed a prospectus for its IPO, issuing 7,700,000 ordinary shares to the investing public at $14.00 per share for anticipated gross proceeds of $107,800,000. Thereafter, on December 2, 2019, Tufin Software filed a second registration statement with the SEC, which was declared effective on December 5, 2019. On December 5, 2019, Tufin Software filed a prospectus for its SPO, issuing an additional 4,279,882 ordinary shares to the investing public at $17.00 per share for anticipated gross proceeds of $72,757,994.
The Tufin Software class action lawsuit alleges that the IPO and SPO offering documents contained misleading statements in that, among other things: (i) Tufin Software’s customer relationships and growth metrics were overstated, particularly with respect to North America; (ii) Tufin Software’s business was deteriorating, primarily in North America; and (iii) as a result, Tufin Software’s representations regarding its sustainable financial prospects were overly optimistic.
On January 8, 2020, Tufin Software disclosed significantly lowered financial expectations. Specifically, Tufin Software: (i) expected to report total revenue in the range of $29.5 million to $30.1 million, lowered from its previous guidance of total revenue in the range of $34.0 million to $38.0 million; and (ii) now anticipated a non-Generally Accepted Accounting Principles (“GAAP”) operating loss in the range of $1.1 million to $2.6 million, compared to the previous guidance of non-GAAP operating profit in the range of $0.0 million to $3.0 million. The primary reason given for the revenue shortfall was Tufin Software’s “inability to close a number of transactions, primarily in North America, that [Tufin Software] anticipated would close but did not close by the end of the quarter.” Following this news, the price of Tufin Software stock fell approximately 24% and its market capitalization declined nearly $145 million. As of the time the Tufin Software class action lawsuit was filed, Tufin Software shares continued to trade significantly below both the IPO price of $14.00 per share and the SPO price of $17.00 per share.
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 seven 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.