Pivotal Software, Inc.

In April 2018, Pivotal Software completed its initial public offering (“IPO”) in which it sold more than 42 million shares of its common stock at $15.00 per share. 

On June 4, 2019, after the market closed, the Company conveyed its first quarter 2019 financial and operating results, which were negatively impacted by “sales execution and a complex technology landscape.” Also, Wedbush Securities analyst Daniel Ives asserted in addition to the “disastrous” operating results, that the Company’s management team, “does not have a handle on the underlying issues negatively impacting its sales cycles and the activity in the field which gives us concern that this quarter will be the start of some ‘dark days ahead’ for Pivotal (and its investors).”

On this news, the Company’s share price fell $7.65, or more than 41%, to close at $10.89 per share on June 5, 2019, thereby injuring investors.

The complaint filed in this class action alleges that the Registration Statement was false and misleading and omitted to state material adverse facts. Specifically, Defendants failed to disclose to investors: (1) that the Company’s Pivotal Application Service (“PAS”) product was not compatible with the industry-standard Kubernetes platform; (2) that, as a result, the PAS product faced reduced demand as the industry shifted away from the outdated product; (3) that the Company’s Pivotal Container Service (“PKS”) product, though compatible with Kubernetes, was severely limited and could not meet large enterprises’ needs; (4) that, as a result, the Company could not adequately meet industry demand for a Kubernetes-compatible product that met customers’ wide range of needs; (5) that, as a result of the foregoing, the Company was experiencing deferred sales, lengthening sales cycles, and diminished growth; (6) that, as a result, the Company would be forced to reengineer its flagship PAS product to be compatible with Kubernetes; and (7) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.