A securities class action has been filed against Snowflake Inc. (SNOW) on behalf of all persons and entities who purchased the Snowflake Class A common stock between June 27, 2023 through February 28, 2024. This case has been filed in the USDC – NDCA.
The Complaint alleges that during the Class Period, Defendants repeatedly made positive statements about the state of its business, including positive statements about customer usage of, and new developments for, its products. At the same time, Defendants failed to disclose that: (1) product efficiency gains, Iceberg Tables and tiered storage pricing were expected to have a material negative impact on consumption and revenues, and (2) as a result, Defendants’ positive statements about consumption patterns, revenues, and demand for Snowflake products lacked a reasonable basis. The Complaint further alleges that during the Class Period, Defendants denied rumors of Defendant Slootman’s resignation and failed to disclose that Defendant Slootman’s resignation was impending.
On February 28, 2024, Snowflake shocked investors when, after the market closed, the Company issued a press release and filed a report with the SEC on Form 8-K that disclosed its financial results for the quarter ended January 31, 2024 and full fiscal year 2024. On that same day, during a conference call with investors and analysts after the disclosure of Snowflake’s financial results, Defendant Scarpelli stated that they were forecasting increased revenue headwinds associated with product efficiency gains, tiered storage pricing and the expectation that some of their customers will leverage Iceberg Tables for their storage. On that same day, Snowflake also issued a press release and filed a report with the SEC on Form 8-K that disclosed that effective February 27, 2024, Frank Slootman retired as Chief Executive Officer of Snowflake Inc.
On this news, the price of Snowflake’s Class A common stock declined $41.72, or 18.14%, from a closing price of $230.00 per share on February 28, 2024, to close at $188.28 per share on February 29, 2024.