(CN) - Investors in information technology company Tintri Inc. claim in a class action that they were misled during the company's initial public offering this summer due to Tintri executives' alleged failure to inform them that the company was experiencing upheaval in its sales organization in the midst of going public.
According to the lawsuit, Mountain View, California-based Tintri develops and markets an enterprise cloud platform combining cloud management software technology and a range of all-flash storage systems for virtual and cloud environments internationally and in the U.S.
On July 6, the class claims Tintri executives and its underwriters sold 8,572,000 shares to the investing public at $7 per share and sold another 1,000,000 shares at a second closing on Aug. 1, raising an additional $7 million.
The suit contends that a registration statement filed with the Securities Exchange Commission was "negligently prepared."
The lawsuit asserts that Tintri executives were required to disclose any adverse events and uncertainties that may affect the company but failed to do so in the registration statement.
Six weeks after the IPO, Tintri announced that it had lowered its revenue and earnings per share guidance, explaining that its chief sales officer had left the company and its sales organization had "flattened." The news caused the company's stock price to plummet, trading at $3 per share, a fall of nearly 60% from the IPO price, the lawsuit states.
The class is represented by Brian J. Robbins, Stephen J. Odds and Eric M. Carrino of Robbins Arroyo LLP in San Diego, Calif.
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