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Tintri Misleading IPO Registration Statement Securities Class Action

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When Tintri, Inc. decided to go public, it made the required filings with the Securities and Exchange Commission (SEC). The initial public offering (IPO) raised $60 million for the company, but the complaint for this class action claims the filings contained false and misleading statements, in violation of the Securities Exchange Act of 1934.

The class for this action is all persons or entities who acquired the publicly-traded securities of Tintri, Inc. pursuant or traceable to its Registration Statement and Prospectus issued in connection with the company’s IPO of June 30, 2017.

Tintri sells an enterprise cloud platform that combines cloud management software with a range of all-flash storage systems in the US and elsewhere. For the IPO, it filed a Registration Statement, including a Preliminary Prospectus. Later it filed an amended Registration Statement. The SEC declared the filings effective on June 29, 2017, but the following day, the day of the IPO, the company filed its Final Prospectus.

The Registration Statement contained a lengthy section on the company’s growth strategy to “extend our position as a leader in providing enterprise cloud solutions to large organizations and CSPs.” The list of elements included such things as “Extend Our Differentiation in Enterprise Cloud through Continued Software Innovation” and “Pursue Addition Large Organizations and CSPs.”

However, the complaint claims that these statements were materially false and misleading because they failed to disclose that the company experienced “distraction, disruption, and sales attrition” during its IPO.

The complaint quotes Ken Klein, the company’s Chairman and CEO, on a second-quarter earnings conference call on September 20, 2017, as saying, “Q2 revenue grew 27% over the same quarter a year ago, at the low end of our expectations. This is primarily due to distraction, disruption and some sales attrition [that] occurred during and after our IPO.” It also announced some changes in its sales organization, including the departure of the company’s Chief Sales Officer.

According to the complaint, share prices began to fall, and they now trade at less than $5 per share, which is less than 65% of the IPO price.

The complaint claims that the statements in the company’s Registration Statement violated Sections 11 and 15 of the Securities Exchange Act of 1934. It asks the court to award damages and interest to the class, plus attorneys’ and experts’ fees and expenses and any other relief the court deems just and proper. 

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