Cognyte Software Ltd. (NASDAQ: CGNT)
NEW YORK, NY – March 9, 2023 – Wolf Haldenstein Adler Freeman & Herz LLP announces that a federal securities class action lawsuit has been filed against Cognyte Software Ltd. (NASDAQ: CGNT) (“Cognyte” or the “Company”) in the United States District Court for the Southern District of New York on behalf of all persons and entities who purchased or otherwise acquired Cognyte securities between February 2, 2021 through June 28, 2022 both dates inclusive (the “Class Period”).
All investors who purchased shares and incurred losses are advised to contact the firm immediately at firstname.lastname@example.org or (800) 575-0735 or (212) 545-4774.
If you have incurred losses, you may, no later than May 1, 2023, request that the Court appoint you lead plaintiff of the proposed class. Please contact Wolf Haldenstein to learn more about your rights.
Cognyte is a security analytics software company, which began trading as an independent entity in February 2021 following a spin-off from Verint Systems Inc. On February 1, 2021, Cognyte and Verint completed a spin-off and related separation and distribution.
The filed Complaint alleges that the Registration Statement issued in connection therewith made false and misleading statements with respect to the solutions and services the Company provided and provides to customers. Specifically, that the Company’s tools and services violated community standards and terms of service of communication network sources and technologies, like Facebook.
On December 16, 2021, Meta, the parent company of Facebook and Instagram, issued a Threat Report, which revealed for the first time that Cognyte regularly targeted journalists, critics of authoritarian regimes, families of opposition and human rights activists and collected intelligence on these people by manipulating them to reveal information and/or compromising their devices or accounts. Given the severity of these violations, Meta disabled Cognyte’s ability to use its platforms, shared its findings with security researchers, other platforms and policymakers, and alerted nearly 50,000 individuals who were believed to be targeted.
On this news, Cognyte’s common stock fell 5.11% closing at $18 per share, before declining another 5.5% the next trading day. By December 22, 2021, Cognyte’s stock had fallen to $15 per share, representing a decline of nearly 21%.
Then, on April 5, 2022, Cognyte filed its Annual Report on Form 20-F and revealed that the Company was forced to modify its solutions in response to the Threat Report. The Company’s results included the period during which Facebook disrupted and disabled Cognyte’s use of the platform. Cognyte badly missed consensus estimates and significantly undershot the midpoint of its guidance range by several millions of dollars. The Company’s non-GAAP earnings of $0.16 per share were not only down significantly from the $0.36 per share it earned in the year-ago quarter, but also $0.06 per share below analysts’ expectations of $0.22 per share.
On this news, the Company’s stock price plummeted over 31% closing at $8.03 per share on April 5, 2022.
Then on June 28 2022, Cognyte reported its first quarter results, which once again badly missed analyst estimates across the board. Analysts downgraded the Company. For instance, William Blair downgraded Cognyte to “market perform” and concluded that Cognyte’s “low pipeline conversion” issues were a symptom of a broader problem. On this news, Cognyte’s shares declined $1.84 or 28.66% to close at $4.58.
Wolf Haldenstein has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has attorneys in various practice areas; and offices in New York, Chicago and San Diego. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities multi-district and consolidated litigation.
If you wish to discuss this action or have any questions regarding your rights and interests in this case, please immediately contact Wolf Haldenstein by telephone at (800) 575-0735 or via e-mail at email@example.com.
Wolf Haldenstein Adler Freeman & Herz LLP
Patrick Donovan, Esq.
Gregory Stone, Director of Case and Financial Analysis
Email: firstname.lastname@example.org, email@example.com or firstname.lastname@example.org
Tel: (800) 575-0735 or (212) 545-4774
Certification and Authorization Pursuant to Federal Securities Laws
Date of signing: 03/28/2023