Pomerantz LLP has been appointed Lead Counsel in a class action lawsuit has been filed against Hortonworks, Inc. (“Hortonworks” or the “Company”) and certain of its officers. The class action, filed in United States District Court, Northern District of California, and docketed under 16-cv-00980, is on behalf of a class consisting of all persons or entities who purchased Hortonworks securities between November 4, 2015 and January 15, 2016 inclusive (the “Class Period”). This class action seeks to recover damages against Defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934.
Hortonworks focuses on the development, distribution, and support of the Hadoop open source project in the United States and internationally. The Company offers Hortonworks Data Platform, an enterprise-grade data management platform that purportedly enables its customers to capture, store, process, and analyze increasing amounts of existing and new data types without the need to replace their existing data center infrastructure. The Company also provides Hortonworks Sandbox, a personal, portable, and free to use Hadoop environment purportedly designed to offer the easiest way to get started with Enterprise Grade Hadoop and the Hortonworks Data Platform. In addition, Hortonworks provides support subscription, and training and consulting services – from which it derives substantially all of its revenues.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, cash position, prospects, and internal controls. Specifically, in November 2015, Defendants: (i) misrepresented that Hortonworks had sufficient cash and cash equivalents to fund 12 months of working capital and capital expenditure needs; (ii) failed to disclose that Hortonworks in actuality lacked adequate cash to meet those working capital and capital expenditure requirements over that period of time; (iii) failed to disclose that, as a result, Defendants were contemplating a significant offering to fund its operations; and (iv) as a result of the foregoing, Defendants’ public statements were materially false and misleading at all relevant times.
On Friday, January 15, 2016, post-market, Hortonworks announced it had retained Goldman Sachs to raise $100 million in a secondary offering. Analysts expressed surprise, with one stating, “We believe it will be incumbent on HDP during its roadshow to show why this offering, announced in this way, at this time, should not be interpreted as evidence of serious difficulty.”
On this news, Hortonworks’s stock fell $6.13, or nearly 37%, to close at $10.44 on January 19, 2016, the next trading day.