BOCA RATON, Fla., Feb. 25, 2022 (GLOBE NEWSWIRE) -- Saxena White P.A. has filed a securities fraud class action lawsuit (the “Class Action”) in the United States District Court for the District of Massachusetts against Cerence Inc. (“Cerence” or the “Company”) (NASDAQ: CRNC) and certain of its executive officers (collectively, “Defendants”). The Class Action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and U.S. Securities and Exchange Commission (“SEC”) Rule 10b-5 promulgated thereunder on behalf of all persons or entities that purchased Cerence common stock between February 8, 2021 and February 4, 2022, inclusive (the “Class Period”), and were damaged thereby (the “Class”). The Class Action is captioned: City of Miami Fire Fighters’ and Police Officers’ Retirement Trust v. Cerence Inc. et al., No. 1:22-cv-10321 (D. Mass.).
Cerence is a Burlington, Massachusetts-based company that focuses on building artificial intelligence-powered virtual assistants primarily for the automotive market. Despite the ongoing COVID-19 pandemic, supply-chain issues, and the semiconductor shortage, which reduced the global production of automobiles, Cerence continued to report growing revenues and strong demand for software licenses for its products. Cerence even touted its “visibility” into demand for its products by providing revenue guidance for fiscal year 2024, guidance that was a focus of securities analysts and that the Company raised significantly during the Class Period.
The Class Action alleges that, during the Class Period, Defendants made materially false and misleading statements and failed to disclose material adverse facts about the Company’s business, operations, and prospects in violation of the Exchange Act and SEC Rule 10b-5. Specifically, Defendants failed to disclose: (1) that the global semiconductor shortage had a materially negative impact on demand for Cerence’s software licenses; (2) that Defendants masked the impact of the semiconductor shortage on demand for the Company’s software licenses by pulling forward sales; and (3) that, as a result of the above, Defendants’ statements about Cerence’s business, operations, and prospects were false and misleading and/or lacked a reasonable basis.
The truth began to emerge during Cerence’s earnings call on November 22, 2021 for the fiscal fourth quarter of 2021 ended on September 30, 2021, causing Cerence’s stock price to fall and investors to suffer substantial losses. On that call, Cerence announced revenue guidance for fiscal year 2022 that was well below analysts’ expectations. In response to this revelation, Cerence’s stock price fell more than 20 percent from a closing price of $104.06 the prior trading day, to a close of $82.59 on November 22, 2021. The Company’s stock price continued to fall another 5% the following day to close at $78.27 on November 23, 2021.
Then, approximately three weeks later, Cerence’s Chief Executive Officer (“CEO”) Sanjay Dhawan abruptly resigned. On this news, Cerence’s stock price fell an additional 11% from a closing price of $78.08 on December 14, 2021 to a closing price of $69.20 on December 15, 2021.
Finally, on February 7, 2022, the Company announced results for its fiscal first quarter of 2022 ended on December 31, 2021 and shocked the market with three disclosures. First, the Company announced that Chief Financial Officer Mark Gallenberger would be retiring, effective March 11, 2022. Next, during its earnings conference call, new CEO Stefan Ortmanns announced he had conducted a review of each of the Cerence business units’ plans, forecasts, and assumptions, and determined the “conversion from bookings to revenue will take longer than expected.” As a result, Cerence was forced to lower its fiscal year 2022 guidance, only a few months after providing disappointing guidance for the same period. Finally, Cerence completely withdrew the closely watched fiscal year 2024 guidance. On this news, Cerence’s stock price fell an additional 30%, from a closing price of $63.58 on the prior trading day of February 4, 2022, to close at $43.61 on February 7, 2022.
If you purchased Cerence common stock during the Class Period and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as lead plaintiff. If you wish to apply to be lead plaintiff, a motion on your behalf must be filed with the U.S. District Court for the District of Massachusetts no later than April 26, 2022. The lead plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as lead plaintiff to share in any Class recovery in the Class Action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member.
You may contact Lester Hooker (lhooker@saxenawhite.com), an attorney and Director at Saxena White P.A., to discuss your rights regarding the appointment of lead plaintiff or your interest in the Class Action. You also may retain counsel of your choice to represent you in the Class Action.
You may obtain a copy of the Complaint and inquire about actively joining the Class Action at www.saxenawhite.com.
Saxena White P.A., with offices in Florida, New York, California, and Delaware, is a leading national law firm focused on prosecuting securities class actions and other complex litigation on behalf of injured investors. Currently serving as lead counsel in numerous securities fraud class actions nationwide, Saxena White has recovered billions of dollars on behalf of injured investors.
CONTACT INFORMATION
Lester R. Hooker, Esq.
lhooker@saxenawhite.com
Saxena White P.A.
7777 Glades Road, Suite 300
Boca Raton, FL 33434
Tel: (561) 206-6708
Fax: (561) 394-3382
www.saxenawhite.com
