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Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Seritage, 2U, Teradata, and Lamb Weston and Encourages Investors to Contact the Firm
Globe Newswire 7-Aug-2024 9:00 PM
NEW YORK, Aug. 07, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Seritage Growth Properties (NYSE:SRG), 2U, Inc. (NASDAQ:TWOU), Teradata Corporation (NYSE:TDC), and Lamb Weston Holdings, Inc. (NYSE:LW). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
On August 14, 2023, after the market closed, Seritage revealed that there was a "material weakness" in the Company's internal control over financial reporting "due to a deficiency in the design of our control over the identification of impairment indicators for investments in real estate and documentation of evidence of review." Moreover, the deficiency related "to the failure to identify potential indicators of impairment related to development projects in a timely manner."
On this news, Seritage's stock price fell $0.86, or 9.67%, to close at $8.03 per share on August 15, 2023, on unusually heavy trading volume.
Then, on May 10, 2024, after the market closed, Seritage released its first quarter 2024 financial results, revealing it was "adjusting [its] pricing projections for some of [its] assets." As a result, the gross value of the Company's portfolio of assets was reduced by at least $325 million.
On this news, Seritage's stock price fell $2.54, or 27.3%, to close at $6.78 per share on May 13, 2024, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company lacked effective internal controls regarding the identification and review of impairment indicators for investments in real estate; (2) that, as a result, the Company had overstated the value and projected gross proceeds of certain real estate assets; and (3) that, as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Class Period: February 9, 2022 - February 12, 2024
Lead Plaintiff Deadline: August 12, 2024
On November 9, 2023, after the market closed, the Company announced that 2U and USC would wind down their 15-year collaboration in the Company's major programs, and that USC would pay approximately $40 million in connection with this exit. The Company also announced it would recognize a total of $80 million in the fourth quarter related to partners seeking a negotiated exit from certain degree programs, which the Company euphemistically referred to as "portfolio management activities." The Company disclosed these portfolio management activities would offset a 21% decrease in full course equivalent enrollment, which was primarily driven by "the impact of [its] transition to a new marketing framework in mid-2022." The Company also revealed fiscal quarterly results, showing Degree Program revenue was flat year over year, that total revenue had decreased 1%, and that the Alternative Credential Segment revenue decreased 3%.
On this news, 2U's share price fell $1.35, or 56.72% to close at $1.03 on November 10, 2023, on unusually heavy trading volume.
Then, on February 12, 2024, after the market closed, 2U disclosed that due to the Company's debt, "there is substantial doubt about its ability to continue as a going concern." The Company further disclosed it recognized $88.0 million of revenue from portfolio management activities (i.e., fees negotiated for early partnership contract termination) in the year and it would assume another $10 million from such activities in the first quarter of 2024 and at least $15 million in full-year 2024. The Company also announced its full year revenue of $946 million, significantly missing the Company's guidance of $965 million to $990 million, and revealed Degree Program Segment revenue, Alternative Credential Segment Revenue, and total revenue, all decreased 2% year over year. The Company also issued full year 2024 guidance, estimating revenue would continue to decline from $946 million, to $805 million to $815 million.
On this news, 2U's share price fell $0.55 or 59.33%, to close at $0.37 on February 13, 2024, on unusually heavy trading volume.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) the Company was unable to sustain relationships with key universities and organizations; (2) as a result, certain degree programs and partnerships failed to materialize or were cancelled; (3) the Company's transition to a platform company would lead to a decrease in full course equivalent enrollments; (4) accordingly, the Company had overstated the stability and/or longevity of its contractual agreements and/or revenue sources; and (5) that, as a result of the foregoing, Defendants' positive statements about the Company's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
Class Period: February 13, 2023 - February 12, 2024
Lead Plaintiff Deadline: August 13, 2024
Teradata, together with its subsidiaries, provides a connected multi-cloud data platform for enterprise analytics. Historically, Teradata primarily dealt with the information technology departments of its customers. However, as the Company expanded its business model and strategic objectives, it increasingly began to engage with additional customer business units.
To measure the Company's progress in achieving its strategic objectives, Teradata utilizes certain financial and performance metrics including Total Annual Recurring Revenue ("ARR")—or the annual value at a point in time of all recurring contracts, including subscription, cloud, software upgrade rights, and maintenance—and, included within Total ARR, Public Cloud ARR—or the annual value at a point in time of all contracts related to public cloud implementations of its cloud data platform. Accordingly, Teradata's Total ARR for a certain time period is determined, in significant part, by the number of customer transactions the Company is able close in that period.
On February 13, 2023, Teradata issued a press release reporting its Q4 and full year 2022 financial results. In providing an outlook for the full-year 2023, the press release stated that "Public cloud ARR is expected to increase in the range of 53% to 57% year-over-year" and "Total ARR is expected to increase in the range of 6% to 8% year-over-year."
Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) under Teradata's expanded business model, which involved engagement with additional customer business units and decisionmakers, transactions with the Company's customers took longer to finalize; (ii) Teradata thus overstated its ability to close customer transactions within their intended timeframes under its expanded business model; (iii) Teradata failed to timely close several customer transactions that it had factored into its outlook for 2023 ARR growth; (iv) as a result, the Company was unlikely to meet its full year 2023 Total and Public Cloud ARR expectations; and (v) as a result, the Company's public statements were materially false and misleading at all relevant times.
On December 7, 2023, at a Barclays Global Technology Conference Teradata's Chief Financial Officer Defendant Claire Bramley revealed that the Company had "an eight-figure deal that potentially [. . .] could get pushed out [of Q4 2023]", the effect of which "could put [the Company] towards the low end or slightly below the range for cloud ARR that [it] previously gave."
On this news, Teradata's stock price fell $2.89 per share, or 6.24%, to close at $43.40 per share on December 7, 2023.
Then, on February 12, 2024, Teradata announced its Q4 and full year 2023 financial results. Among other things, the Company stated that due to "deal timing issues" public cloud ARR increased by only 48% and total ARR increased by only 6% for the full year 2023, falling well short of the Company's previously issued expectations for these performance metrics.
On a conference call held that same day to discuss the Company's Q4 and full year 2023 results (the "Q4 2023 Earnings Call"), Teradata's Chief Executive Officer Defendant Stephen McMillan ("McMillan") confirmed that the "deal timing issues" related to the Company's failure to timely finalize certain transactions that would have contributed to full year ARR growth if they had been closed in 2023. Specifically, Defendant McMillan claimed that because "Teradata is becoming even more strategic to corporations and touching all levels of [its] customers' organizations," there were "more executive decision makers" required to close these deals and that "[t]hese dynamics cause a number of transactions to move into 2024." As a result, Defendant McMillan revealed that "there was a handful of large deals that slipped out of December [2023] and each were worth $2 million or more of cloud ARR growth."
On this news, Teradata's stock price fell $10.57 per share, or 21.66%, to close at $38.22 per share on February 13, 2024.
Lamb Weston is the largest producer of frozen potato products in North America and the second largest worldwide. The Company sells its products to restaurants and retailers around the world. One of Lamb Weston's largest customers is fast-food chain, McDonald's.
On July 25, 2023, Lamb Weston announced that it had completed the design phase of a new Enterprise Resource Planning ("ERP") software system that the Company would work to implement across its operations. According to the Company, that new software system would manage and integrate critically important aspects of the Company's business, including, among other things, supplier payments, inventories, warehousing, customer invoicing, and order shipments. Investors were told that the new ERP system would replace Lamb Weston's antiquated financial and operating systems, which the Company's Chief Financial Officer acknowledged suffered from Lamb Weston's "decades of under-spending in [information technology]." In late November 2023, Lamb Weston transitioned some of its central systems to the new ERP infrastructure.
The complaint alleges that, throughout the Class Period, Defendants made numerous material misrepresentations and omissions regarding the design and implementation of Lamb Weston's new ERP system. Specifically, throughout the Class Period, (1) Defendants represented that, through the design of the Company's new ERP system, Lamb Weston had "strengthen[ed] [its] operational infrastructure." (2) The Company also downplayed any issues it experienced with the implementation of the system as merely "usual bumps," and told investors that its financial guidance for fiscal 2024 appropriately accounted for any negative financial impact associated with the system's deployment.
The complaint further alleges that the truth emerged on April 4, 2024, when Lamb Weston reported financial results for its fiscal third quarter 2024, and disclosed significant problems with its transition to the new ERP system. Those problems caused Lamb Weston to lose over $130 million in sales during the third quarter and led the Company to significantly reduce its sales guidance for its full fiscal year. The unsuccessful ERP transition resulted in Lamb Weston's "reduced visibility into finished goods inventory at [ ] distribution centers," which negatively impacted the Company's ability to fulfill customer orders, resulting in shipment delays and cancelled orders. In total, Lamb Weston's disastrous ERP system roll-out negatively impacted the Company's net sales by $135 million, net income by $72 million, and adjusted earnings before interest, taxes, depreciation, and amortization by $95 million. Lamb Weston also cut its sales guidance range for fiscal 2024 by $330 million, at the midpoint. The Company disclosed that it expected sales volumes in its fiscal fourth quarter 2024 to be negatively impacted by some customers that were affected by Lamb Weston's botched ERP transition, as those customers turned to Lamb Weston's competitors to meet their needs. As a result of these disclosures, the price of Lamb Weston stock declined by $19.59 per share, or over 19%.
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
