Shareholders of software company Splunk accused the company Friday of omitting key facts resulting in a 23 percent decline in stock price in a putative class action lawsuit. Chiefly, the shareholder accused Splunk of failing to reveal that it was not closing deals with its largest customers in its third fiscal quarter of 2021, and also that it was not attaining its previously projected financial targets.
The Northern District of California filing explained that Splunk is a San Francisco, Calif.-based, Delaware-incorporated company that provides software enabling businesses to investigate, monitor, and analyze machine-generated data. The complaint claimed that on Oct. 21, Splunk “assured investors that everything was on track for its third quarter 2021 financial results,” yet, the complaint argues, the defendants misrepresented or omitted critical facts.
The company’s financial announcements reportedly revealed a decline in total revenue and non-GAAP (generally accepted accounting principles) earnings. The securities complaint also quoted telephonic discussions with financial analysts where the defendant CEO admitted that the company had failed to timely close large deals when it was expected. The filing stated that observers were “stunned” by Splunk’s slippage. The market reportedly reacted accordingly, with the company’s share price declining from $205.91 to $158.03 on Dec. 3.
For the alleged wrongful acts and omissions, and resulting decline in Splunk common stock’s market value the plaintiff and others who purchased Splunk stock, from Oct. 21 until Dec. 2, are seeking class certification, compensatory and punitive damages, and an award of their attorneys’ fees and costs.
The plaintiff is represented by Block & Leviton LLP.
