Critical Class Action Alert for ZoomInfo Investors: Join Us!
Important Update for ZoomInfo Investors
Attention investors in ZoomInfo Technologies Inc. (NASDAQ: ZI)! If you have experienced losses from purchasing ZoomInfo Class A common stock, now is the time to take action. The national plaintiffs' law firm Lieff Cabraser Heimann & Bernstein, LLP is urging affected investors to reach out regarding a significant pending securities class action. You could potentially be part of this legal process, but it's essential to act swiftly as the deadline for filing as a lead plaintiff is approaching.
Understanding the Class Action Details
The class period for this action spans from November 10, 2020, to August 5, 2024. This time frame has seen significant changes within ZoomInfo that have impacted its investors. The firm is encouraging anyone who acquired shares during this period and suffered losses to engage now, ensuring your voice is heard. Remember, the deadline to apply as a lead plaintiff is November 4, 2024.
What Led to the Class Action?
Investors might be wondering why this class action is being initiated. The action stems from allegations that ZoomInfo misled investors regarding its financial health during the aforementioned class period. Specifically, it was reportedly indicated that the company’s financial results were inflated largely due to a surge in demand caused by the COVID-19 pandemic. This demand appeared to enhance the value of its database of customer contacts, leading to inflated market expectations.
Concerns Raised by Investors
As the class action progresses, several serious concerns have been outlined against ZoomInfo. Allegations include that many customers attempted to drastically cut back or stop using ZoomInfo's services entirely. Furthermore, reports suggest that ZoomInfo allegedly employed aggressive auto-renewal policies to prevent clients from leaving, which might have strained customer relationships and impacted the company’s reputation in the market.
Financial Issues Reported
The timeline of financial disclosures from ZoomInfo paints an alarming picture. In early November 2022, the company reported concerning financial results for the third fiscal quarter, revealing that a wave of scrutiny from customers during renewal periods adversely impacted its financial position. As a result, ZoomInfo's stock price took a significant hit, dropping more than 29%. This marked a crucial turning point that reflected a shift in investor trust.
Continued Challenges and Stock Performance
Further proof of financial struggles emerged in mid-November 2022, when the company reiterated that customer scrutiny would negatively affect revenue growth in the following fiscal year. This continuous bad news contributed to an approximate 17% decline in the stock price over just two trading days.
Fast forward to July 2023, when additional disappointing earnings were revealed. The number of customers with substantial contracts decreased, prompting ZoomInfo to lower its revenue guidance, again contributing to a substantial stock price drop of around 28% over two days.
Recent Developments and Future Outlook
In early May 2024, ZoomInfo shared its financial results, shedding light on the weakness within its small business customer base, which experienced a concerning decline in contract renewals. The reported decline in Net Revenue Retention (NRR) indicated troubling trends, resulting in another significant drop in stock price of more than 24% after this announcement.
The most recent update on August 5, 2024, disclosed a $33 million charge due to customer non-payments. This announcement forced ZoomInfo to pivot its approach, adopting a new business risk model, which now requires that small business customers make upfront payments. This decision underscores the ongoing challenges surrounding customer retention and revenue stability.
About Lieff Cabraser
Lieff Cabraser Heimann & Bernstein, LLP is a prestigious law firm consisting of over 125 attorneys across multiple offices, recognized for its commitment to protecting investors' rights and holding corporations accountable. The firm's extensive experience includes managing high-profile cases and successfully recovering over $129 billion in verdicts and settlements for clients. With a reputation highlighted by accolades such as “Plaintiffs' Powerhouse” from leading legal publications, their dedication to justice is evident.
Frequently Asked Questions
What should I do if I invested in ZoomInfo during the class period?
If you suffered losses during the class period, it’s recommended to contact Lieff Cabraser to discuss your situation and the possibility of joining the class action.
What is the deadline for filing as a lead plaintiff?
The deadline to apply as a lead plaintiff in the ZoomInfo class action is November 4, 2024.
What allegations are made against ZoomInfo?
The company is accused of inflating its financial results and using coercive practices regarding customer contracts, which led to significant investor losses.
How has ZoomInfo's stock performed recently?
ZoomInfo's stock has experienced considerable volatility, including drops of over 29% and 24% following negative financial disclosures in 2022 and 2024, respectively.
Who can be contacted for more information about the class action?
For inquiries, interested parties can reach out via email or text or call 1-800-541-7358 for information regarding the class action.
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