SAN DIEGO, Aug. 15, 2024 (GLOBE NEWSWIRE) -- A class action lawsuit has been filed on behalf of purchasers or acquirers of DXC Technology Company (NYSE: DXC) (“DXC” or the “Company”) common stock between May 26, 2021 and May 16, 2024, inclusive (the “Class Period”), charging the Company and certain current and former senior executives (collectively, “Defendants”) with violations of the federal securities laws.
DXC investors have until October 1, 2024 to seek appointment as lead plaintiff of the DXC class action lawsuit.
If you purchased DXC common stock between May 26, 2021 and May 16, 2024, and suffered substantial losses, and you wish to obtain additional information or serve as lead plaintiff in this lawsuit, you may submit your information and contact us here: https://dicellolevitt.com/securities/dxc-technology/.
You can also contact DiCello Levitt attorney Hani Farah by calling (619) 923-3939 or at investors@dicellolevitt.com. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
No Class Has Been Certified. Until a class is certified, you are not represented by counsel unless you retain one. You may select counsel of your choice.
Case Allegations
DXC is an information technology (“IT”) services and consulting company. As alleged in the DXC lawsuit, before the start of the Class Period, DXC told investors the Company had embarked on a “transformation journey” that would position the Company for success. Throughout the Class Period, Defendants misrepresented this purported “transformation journey,” telling investors it “changed the entire trajectory of the business” and helped DXC to “deliver[] strong financial results.” Furthermore, Defendants misrepresented DXC’s ability to integrate previous acquisitions while highlighting the Company’s commitment to reducing restructuring and transaction, separation, and integration (“TSI”) costs to increase cashflow and “unleash [DXC’s] true earnings power.”
According to the DXC lawsuit, these statements were materially false and misleading. In truth, Defendants knew, or recklessly disregarded, that DXC had reduced restructuring and TSI costs by limiting integration efforts. As a result, Defendants simply deferred costs that DXC ultimately needed to implement the restructuring that was heavily promoted to investors during the Class Period.
The truth started to emerge on August 3, 2022, when DXC reported disappointing financial results for the first quarter of 2022, despite having reiterated its guidance just six weeks prior. Defendants blamed the Company’s poor performance on the fact that its “cost optimization efforts have moved at a slower pace than anticipated.” On this news, the price of DXC common stock fell $5.37 per share, or 17%, from a closing price of $31.52 per share on August 3, 2022, to close at $26.15 per share on August 4, 2022. However, DXC’s stock price remained inflated due to Defendants’ continued misrepresentations concerning DXC’s transformation and successful reduction in restructuring and TSI costs.
Then, on December 20, 2023, DXC announced the abrupt departure of its Chief Executive Officer (“CEO”) and Chairman of the Board, Defendant Michael Salvino. On this news, DXC’s stock price dropped 12%, from a closing price of $25.03 per share on December 19, 2023, to close at $21.99 per share on December 20, 2023.
Finally, on May 16, 2024, DXC’s new CEO admitted that “the previous restructurings did not set a real, clean, solid, fully integrated baseline for profitable growth” because the systems that were acquired were “never integrated, never deduped,” adding that the Company was “not [a] fully functional organization.” DXC also announced it would need to spend an additional $250 million to achieve the restructuring and integration process it falsely claimed to have been successfully implementing during the Class Period. These disclosures caused the price of DXC common stock to decline $3.36 per share, or nearly 17%, from a closing price of $19.88 per share on May 16, 2024, to close at $16.52 per share on May 17, 2024.
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