NEW YORK, March 11, 2024 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP reminds investors that a class action lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of those who acquired Snowflake Inc. (“Snowflake” or the “Company”) (NYSE:SNOW) securities during the period of September 16, 2020 through March 2, 2022, inclusive (“the Class Period”). Investors have until April 29, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
[Click here to learn more about the class action]
On August 24, 2020, Snowflake filed with the SEC a registration statement on Form S-1 for its IPO, which was declared effective on September 15, 2020. Over the next several fiscal quarters, the price of Snowflake shares skyrocketed up to over $400 per share as the Company painted a positive picture of the Company’s business and prospects. Snowflake claimed that the Company had experienced triple digit growth in product revenue and its remaining performance obligations each quarter from the third fiscal quarter of 2021 to the second fiscal quarter of 2022.
On March 2, 2022, Snowflake revealed that its product revenue growth rate for fiscal 2023 was projected to be in the range of 65% to 67%, far below the triple-digit growth and purportedly ongoing favorable business trends highlighted by the Company during the Class Period. On this news, the price of Snowflake shares declined by $40.67 per share, or approximately 15.4%, from $264.69 per share on March 2, 2022 to close at $224.02 on March 3, 2022.
The lawsuit alleges that (i) Snowflake had systematically oversold capacity to customers which created a misleading appearance of the demand for Snowflake’s products and services; (ii) Snowflake had provided significant discounts to its customers prior to its IPO that temporarily boosted sales but would not be sustainable after the IPO and/or necessitate efficiency adjustments that negatively impacted client consumption and the Company’s revenue and profit margins; (iii) as a result of (i)-(ii), Snowflake’s customers were poised to roll over a material amount of unused credits (and thereby cannibalize future sales) at the end of their contracts’ terms or to refuse to renew their contracts at prior consumption levels; and (iv) as a result of (i)-(iii), Snowflake’s product revenue and remaining performance obligations had been artificially inflated leading up to and during the Class Period.
If you purchased or otherwise acquired Snowflake securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq.
212-699-1180
https://www.kmllp.com
investigations@kmllp.com
