Class Action Filed for ZoomInfo Investors Amid Concerns
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Class Action Lawsuit for ZoomInfo Technologies Investors
In a significant development for investors of ZoomInfo Technologies Inc. (NASDAQ: ZI), Glancy Prongay & Murray LLP, a leading national law firm specializing in shareholder rights, has announced the filing of a class action lawsuit. This initiative is aimed at protecting the interests of investors who acquired shares of ZoomInfo common stock during a specified period.
Details of the Class Period
The class action pertains to investors who purchased shares between November 10, 2020, and August 5, 2024. If you were part of this group, it is important to note that you have until November 4, 2024, to file a motion to be appointed as lead plaintiff. This legal avenue can provide a means to seek recovery for potential losses incurred as a result of misleading statements by the company.
Impact of Financial Results on Investors
On August 5, 2024, ZoomInfo reported its financial results for the second quarter of 2024, which shocked many investors as the company missed revenue and earnings expectations significantly. Additionally, the company revised its full-year guidance downward for key financial indicators including revenue, adjusted operating income, and free cash flow. An unexpected $33 million charge related to customer non-payments has raised further concerns about the company’s financial health.
Stock Price Reaction
This disappointing news led to a significant drop in ZoomInfo's stock price, with shares plummeting by $1.79, equating to a 10.3% decline, closing at $8.01 on August 6, 2024. Such a sharp decline has understandably raised alarms among investors, underscoring the relevance of the current lawsuit and the need for investor protection.
Allegations Against ZoomInfo
The legal complaint alleges various misleading and false statements made by the defendants regarding ZoomInfo's business operations and financial performance. Key points of contention in the complaint include:
- ZoomInfo's financial performance being temporarily inflated by COVID-19, misleading investors regarding the sustainability of growth.
- Material portions of the customer base reportedly attempting to reduce or end their relationships with the company.
- Allegations of coercive business practices designed to retain customers against their will.
- Concerns about the company's financial practices, particularly regarding accounts receivable that are potentially at high risk of non-payment.
These allegations suggest that the company may not have provided a true and fair view of its business prospects, leading to potentially hidden risks for investors.
Retaining Rights and Further Steps
If you are an investor who purchased ZoomInfo stock during the outlined class period, it is imperative to understand your rights. You have the option to seek legal representation. Should you choose not to take immediate action, you can still remain a member of the class without taking further steps or incurring additional legal costs at this stage.
To learn more about this action or if you have concerns regarding your investment and rights, Glancy Prongay & Murray LLP is available to provide insights and assistance. Interested parties can reach out to the firm directly via the contact information provided in the announcement.
Frequently Asked Questions
What is the purpose of the class action against ZoomInfo?
The class action seeks to recover losses for investors caused by misleading statements and financial misrepresentation by ZoomInfo Technologies Inc.
Who can participate in the class action?
Investors who purchased ZoomInfo common stock between November 10, 2020, and August 5, 2024, are eligible to participate in the class action.
What should I do if I have questions about my rights?
Investors can contact Glancy Prongay & Murray LLP for guidance on their rights and the next steps they should take regarding their investments.
What were the key allegations against ZoomInfo?
Allegations include misleading financial statements, coercive customer retention practices, and failure to disclose significant risks associated with customer non-payments.
How has the stock price of ZoomInfo reacted to the recent news?
ZoomInfo's stock price dropped by 10.3% following the announcement of disappointing financial results and guidance changes, raising concerns among investors.
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