Cloudera, Inc. (NYSE: CLDR) Investor Securities Class Action Lawsuit 06/07/2019

If you purchased shares of Cloudera, Inc. (NYSE: CLDR), you have certain options and for certain investors are short and strict deadlines running. Deadline: August 6, 2019. NYSE: CLDR investors should contact the Shareholders Foundation, Inc.

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Company Name(s): 
Cloudera
Case Name: 
Cloudera Shareholder Class Action Lawsuit 06/07/2019
Case Status: 
Lawsuit Filed
Affected Securities
NYSE: CLDR
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
06/07/2019
Class Period Begin: 
04/28/2017
Class Period End: 
06/05/2019
Court of Filing: 
U.S. District Court for the Northern District of California
Deadline To File for Lead: 
08/06/2019
Summary: 

An investor in shares of Cloudera, Inc. (NYSE: CLDR) filed a lawsuit in the U.S. District Court for the Northern District of California over alleged violations of Federal Securities Laws by Cloudera, Inc. in connection with certain allegedly false and misleading statements made between April 28, 2017 and June 5, 2019.

Palo Alto, CA based Cloudera, Inc. provides a suite of data analytics and management products in the United States, Europe, and Asia. Cloudera, Inc. went public in April 2017.

On April 3, 2018, post-market, Cloudera, Inc announced its fourth quarter and fiscal year 2018 results. The Company announced a negative operating cash flow of $22 million during the quarter and provided a disappointing outlook for fiscal year 2018, with total revenues of only $435 million to $445 million, representing a sharp deceleration in growth. On an earnings call discussing the foregoing results, Cloudera revealed that a sharp slowdown in the Company's new expansion bookings had occurred in 2018.

On October 3, 2018, Cloudera, Inc announced that it had entered into a definitive merger agreement with its primary competitor in the Hadoop data analytics space, Hortonworks, Inc. (the "Hortonworks Merger"). In the stock-for-stock deal, valued at $5.2 billion, Hortonworks shareholders would own 40% of the combined Company and receive 1.305 common shares of Cloudera for each share of Hortonworks stock they owned.

On March 13, 2019, post-market, Cloudera, Inc announced its fourth quarter and fiscal year 2019 results, providing weak guidance for the first fiscal quarter after the completion of the Hortonworks Merger. On an earnings call to discuss the foregoing results, Cloudera's Chief Financial Officer, Jim Frankola, revealed that the merged entity would need to take a $62 million "haircut" due to purchase price accounting adjustments and also a $28 million write-down of deferred commission expenses. Frankola further stated that differences in billing periods between the companies would reduce 2020 cash flows by $125 million as the legacy companies reconciled their billing cycles.

On June 5, 2019, post-market, Cloudera, Inc announced its financial and operating results for the first quarter of fiscal year 2020. Cloudera, Inc stated that its first-quarter revenues were $187.5 million, but that several customers had elected to "postpone renewal and expansion" of their subscription agreements. Cloudera also announced that its losses from operations had increased to $103.8 million, roughly double the year-over-year period. In addition, Cloudera revealed that its highest-spending customers were essentially flat for the quarter, that middle-spend customers had declined sequentially, and that it was suffering an elevated dollar churn rate of 15%. Cloudera also slashed its full-year outlook, reducing total revenue guidance by $90 million and stating it expected recurring revenue growth of only 0% to 10% for the year (compared to 18% to 21% in the prior issued guidance) and that it now expected to suffer a negative cash flow from operations of between $75 million and $95 million for the year, more than double the amount stated in the previously issued guidance. The same day, Cloudera, Inc announced that it's Chief Executive Officer, Thomas J. Reilly, would be abruptly retiring from the Company.

Shares of Cloudera, Inc. (NYSE: CLDR) declined from $23.00 per share in June 2017 to as low as $4.89 per share on June 11, 2019.

According to the complaint the plaintiff alleges on behalf of purchasers of Cloudera, Inc. (NYSE: CLDR) common shares between April 28, 2017 and June 5, 2019, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between April 28, 2017 and June 5, 2019, the Defendants failed to disclose, that Cloudera was finding it increasingly difficult to identify large enterprises interested in adopting the Company's Hadoop-based platform, that Cloudera needed to expend an increasing amount of capital on sales and marketing activities to generate new revenues, that Cloudera had materially diminished sales opportunities and prospects and could not generate annual positive cash flows for the foreseeable future, that the primary motivation for the Company's merger with Hortonworks was to generate growth through the acquisition of Hortonworks' existing customers (as opposed to obtaining them organically), and that that the purported synergies and other benefits of the merger with Hortonworks were materially overstated.