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LAW.US
id: 828
CS Disco (LAW) Missed Guidance Case
W.D. Texas
Court1:24-cv-00028
Case number21 Jul 2021
Class period Start11 Aug 2022
Class period End20 Nov 2023
Lead Plaintiff motion deadline- In August 2022, CS Disco shocked investors with disappointing financial results.
- $LAW fell 53%, and lost $933M of its market cap, damaging shareholders.
- Investors suspect CS Disco of failing to disclose its rapid revenue growth was ‘usage driven’ and may be subject to volatility
On August 11, 2022, CS Disco (LAW) released financial results for Q2 2022 that shocked investors and analysts.
- The Company’s revenue growth dropped compared to past quarters.
- The Company alerted the markets that it would no longer be including in its guidance any revenues attributable to its largest customers for the entire year.
On this news, $LAW fell 53% and lost over $933 million of its market capitalization, seriously damaging shareholders.
CS Disco repeatedly touted strong growth in its revenues attributable to customer usage of its cloud-based electronic discovery platform and asserted that it had good advance visibility into changes in the demand from individual customers over time.
Taking all representation into account, Investors have reasons to suspect CS Disco of failing to disclose its rapid revenue growth was ‘usage driven’ and may be subject to volatility, it did not inform investors that it had any indication of significant headwinds to its growth.
Case Status
Motion to dismiss
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Failure to Disclose,
Omissions
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
12 August 2022
Filing date
19 September 2023
Lead Plaintiff Deadline
20 November 2023
Judge
Robert Pitman