The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired Cognyte Software Ltd. (“Cognyte” or the “Company”) (NASDAQ: CGNT) securities during the period from February 2, 2021 through June 28, 2022 (the “Class Period”). Investors have until May 1, 2023 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
On December 16, 2021, after the market closed, Meta, the parent company of Facebook and Instagram, issued a “Threat Report,” which included the results of its “months long” investigation into the “surveillance-for-hire industry,” revealing for the first time that Cognyte (along with six private companies) regularly targeted, without their knowledge, journalists, dissidents, critics of authoritarian regimes, families of opposition, and human rights activists around the world, and collected intelligence on these people by manipulating them to reveal information and/or by compromising their devices and accounts, in violation of Facebook’s “multiple community standards and Terms of Service.” On this news, the price of Cognyte shares decline by $0.97 per share, or approximately 5.11%, from $18.97 per share to close at $18.00 on December 17, 2021.
On April 5, 2022, Cognyte issued its Annual Report on Form 20-F for the period ended January 31, 2022 (the “2021 Annual Report”), revealing that the Company was forced to modify its solutions in response to the Threat Report. On the same day, Cognyte reported its fourth quarter 2021 financial results, revealing that the Company had badly missed analyst consensus estimates for non-GAAP earnings per share and sales, and significantly undershot the midpoint of its guidance range by several millions of dollars. On this news, the price of Cognyte shares declined by $3.63 per share, or approximately 31.13%, from $11.66 per share to close at $8.03 on April 5, 2022.
On June 28, 2022, Cognyte released its first quarter 2022 financial results, which, once again, badly missed analyst estimates across the board. Cognyte’s 1Q22 revenue of $87 million, for example, represented a decline of 25%. Analysts were expecting a decline of 2%. On this news, the price of Cognyte shares declined by $1.84 per share, or approximately 28.66%, from $6.42 per share to close at $4.58 on June 28, 2022.
The lawsuit alleges that, throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose that Cognyte created, distributed, and provided reconnaissance tools and services that violated community standards and terms of service of communication network sources and technologies, such as Facebook, exposing the Company to significant financial and reputational risk.
If you purchased or otherwise acquired Cognyte securities, have information, or would like to learn more about this lawsuit and how it might affect your rights, please contact Thomas W. Elrod of Kirby McInerney LLP by email at firstname.lastname@example.org, 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: http://www.kmllp.com.
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Kirby McInerney LLP
Thomas W. Elrod, Esq.