CHICAGO (CN) – Nielsen Holdings investors brought a federal class action in response to a stock plunge that shows no sign of reversing course, saying the data-analytics giant misled them about multiple threats to its business model.
Filed in Chicago, the complaint came Friday as Nielsen’s stock dropped that afternoon to $27.25, nearly half of its worth two years ago when the stock was trading at $53.33 a share.
Represented by the New York firm Labaton Sucharow and Chicago attorney Michael Smith, investors from the Plumbers and Steamfitters Local 60 Pension Trust say the writing for Nielsen was on the wall since Feb. 11, 2016.
That was the month, according to the complaint, that Nielsen filed form with the Securities and Exchange Commission that “failed to disclose the effects of known trends and uncertainties that were then having, and were reasonably likely to continue to have, a material effect on [Nielsen’s] operating results.”
Among other things, Nielsen’s investors say the company knew at the time that its sales were hurting because of budget cuts wracking the consumer packaged goods industry. Rather than reveal that this change had actually materialized, however, Nielsen described the condition as a potential risk.
Sales of analytics products to the so-called CPG industry accounted for nearly half of Nielsen’s products in 2017, but the complaint says the budget cuts resulted in a permanent decline.
The investors say another miscalculation about EU’s 2016 General Data Protection Regulation compounded Nielsen’s loss of customers to “real-time analytical solutions.”
According to the complaint, Nielsen kept close to its vest how much its work relied on third-party data from providers like Facebook, and that access became increasingly difficult in the wake of the regulation known as the GDPR.
The lead plaintiff wants to represent a class of any person or company who purchased Nielsen stock between Feb. 11, 2016, and July 25, 2018. A press release from the attorneys say this class period is more expansive than the one asserted in a lawsuit filed earlier this year.
While Nielsen is based in the United Kingdom, the Plumbers and Steamfitters Local 60 Pension Trust is based in Louisiana.
Nielsen did not immediately respond to an email request for comment.