Shareholder Investigation of Cloudera, Inc.
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Cloudera, Inc. (CLDR) Accused of Misleading Investors
According to the complaint against Cloudera for alleged violations of the Securities and Exchange Act of 1933 pursuant to the January 2019 merger of Cloudera and Hortonworks, Cloudera, Inc. (CLDR) issued millions of new shares of Cloudera stock to former shareholders of Hortonworks in connection with the merger and pursuant to the registration statement. Each former share of Hortonworks was exchanged for 1.305 shares of newly issued Cloudera stock. However, the registration statement failed to disclose how Cloudera was experiencing increased competition from, and loss of customers and market share to, competitors that offered a more fully integrated product. Moreover, Cloudera’s sales force was working at a competitive disadvantage, without the benefit of a clear roadmap for Cloudera to pitch to customers. As a result, Cloudera customers were delaying renewals. These undisclosed negative events, trends, and uncertainties rendered Cloudera’s reported financial and operational statements incorporated in the registration statement false and misleading. As of June 11, 2019, Cloudera’s stock traded at $5.09 per share, an over 50% decline from the approximately $11 per share on the exchange date for the merger.