On December 12, 2024, Labaton Keller Sucharow was appointed lead counsel in a securities class action against ZoomInfo Technologies, Inc. (ZoomInfo or the Company), executive officers Henry Schuck and Cameron Hyzer, and the Company's primary shareholders TA Associates Management, The Carlyle Group, and DO Holdings (collectively, Defendants). The lawsuit alleges violations under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and U.S. Securities and Exchange Commission Rule 10b-5 promulgated thereunder, on behalf of investors who purchased or otherwise acquired shares of ZoomInfo Class A common stock between November 10, 2020, and August 5, 2024, inclusive (the Class Period).
ZoomInfo is a software and data company whose main product is a commercial data platform specializing in contact and business information. Defendants are accused of making materially false and misleading statements and omissions about ZoomInfo’s financial status.
According to the complaint, ZoomInfo experienced growth in 2020 and 2021 due to “favorable market dynamics” created by the COVID-19 pandemic. Between February 22, 2021, and August 1, 2022, ZoomInfo issued seven press releases announcing the Company’s quarterly revenue had increased year-over-year. Furthermore, on earnings calls, Defendants claimed ZoomInfo’s growth was “broad-based” and that expansion in existing client accounts was continuing to accelerate. Eventually, the truth about ZoomInfo’s financial status began to emerge through a series of corrective disclosures. On November 1, 2024, ZoomInfo published a report disclosing losses and held a call with analysts where Defendant Hyzer revealed difficulties in the Company’s contract renewal process. Financial analysts “panned the report as inconsistent with the Company’s prior representations.” Following this news, the price of ZoomInfo Class A common stock plunged, a pattern which repeated over the next few months as ZoomInfo released new information. The last of five disclosures occurred on August 5, 2024, when ZoomInfo issued a press release announcing the Company’s 2024 second quarter financial results, which revealed that ZoomInfo was incurring a $33 million charge—the result of non-payments from customers—and the Company had thus “been forced to implement a ‘new business risk model’ to reduce write-offs.” ZoomInfo reduced its annual revenue guidance by $65 million at the midpoint, from a range of $1.255 billion-$1.27 billion to a range of $1.19 billion-$1.205 billion. Ultimately, the price of ZoomInfo stock fell around 90% from its Class Period high.
The case is City of Pontiac Police and Fire Retirement System v. ZoomInfo Technologies Inc. et al., No 3:24-cv-05739-TMC (W.D. Wash.). Labaton Keller Sucharow represents Lead Plaintiff State Teachers Retirement System of Ohio and Ohio Public Employees Retirement System (collectively, the Ohio Funds).
