Investigations
Teradata Corp.
Overview
Overview
- Deadline:
- Aug 13, 2024
| Company Name: | Company Name: Teradata Corp. |
| Stock Symbol: | Stock Symbol: TDC |
TERADATA CORP. (NYSE: TDC): Teradata has been sued for violations of the federal securities laws in connection with alleged false and misleading statements made to investors and subsequent significant price declines in the stock.
If you incurred losses in Teradata, you are encouraged to fill out the form below to get more information and speak with an attorney about your rights.
Why is TDC being Sued?
Teradata is an enterprise software company that provides database and analytics-related software, products, and services. Two of the most important financial metrics that Teradata reports to investors are its total annual recurring revenue (“ARR”) and cloud ARR.
The complaint alleges that Teradata and certain of its senior officers made materially false and misleading statements to investors related to: (a) the success of the company’s recently expanded business model to market products to customers beyond their IT units; (b) the robustness of the company’s pipeline and ability to timely close deals; and (c) the company’s revenue growth prospects.
The complaint further alleges that, in reality, Teradata’s expanded business model caused significant delays in the closing of large customer transactions. As a result, it is alleged that the company overstated the health of its pipeline and revenue growth prospects.
BFA is also investigating whether Teradata misrepresented and concealed that several of its most important customers decided years ago to terminate their relationships with the company.
The Stock Declines as the Truth is Revealed
Investors allegedly began to learn the truth on December 7, 2023, when Teradata revealed that certain large deals could be delayed. On this news, the price of Teradata stock declined by $2.89 per share, or 6%, to close at $43.40 per share on December 7, 2023.
Then, on February 12, 2024, Teradata announced that “deal timing issues” caused the company to miss its previously issued ARR guidance. CEO Stephen McMillan explained that, because “Teradata is becoming even more strategic to corporations and touching all levels of [its] customers’ organizations,” there were “more executive decision makers” required to close these deals and that “[t]hese dynamics cause[d] a number of transactions to move into 2024,” each of which “were worth $2 million or more of cloud ARR growth.”
Also on February 12, 2024, Teradata announced disappointing ARR and cloud ARR guidance for 2024, which the company blamed on the loss of “a few large on-prem[ises]” customers to competitors’ cloud services. Significantly, Teradata stated that these “customer decisions . . . were made more than 3 years ago” and “we have known that these erosions were contemplated for some time.”
Investment analysts questioned why the company had not previously disclosed the loss of customers. For instance, on Teradata’s February 12, 2024 earnings call, a Citigroup analyst stated, “I think many of us on the call were not expecting that, but it sounds like you’ve been expecting that for a while.” Additionally, an analyst with Guggenheim wrote in a report dated February 12, 2024 that, “Management said these decisions were made years ago . . . We can’t help but think that this should have already been baked into forecasts.” Likewise, an analyst with Craig-Hallum Capital Group LLC wrote in a February 13, 2024 report, “[w]e are scratching our heads” at the fact the company knew it would lose these customers but did not disclose it.
On this news, the price of Teradata stock declined by $10.57 per share, or 22%, to close at $38.22 per share on February 13, 2024.
Roughly six weeks later, on April 5, 2024, Teradata announced the immediate departure of its Chief Revenue Officer.
Finally, on May 6, 2024, Teradata reported worse than expected ARR and cloud ARR growth for the first quarter of 2024 which the company blamed on cloud “migrations and expansions” that were “slightly below our expectations” and more slippage of deals from 2023.
On this news, the price of Teradata stock declined by $5.24 per share, or 14%, to close at $32.72 per share on May 7, 2024.
The lawsuit seeks to recover compensatory monetary damages for investors sustained because of Teradata’s alleged wrongdoing.
I Suffered Losses, What Should I Do?
If you suffered losses from your investment in Teradata, you should fill out the form below to speak with an attorney about your rights.
All representation is on a contingency fee basis. Shareholders are not responsible for any court costs or expenses of litigation. The Firm will seek court approval for any potential fees and expenses.
You can also contact:
Ross Shikowitz
ross@bfalaw.com
212-789-3619
Why Bleichmar Fonti & Auld LLP?
BFA is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It was named among the Top 5 plaintiff law firms by ISS SCAS in 2023 and its attorneys have been named Titans of the Plaintiffs’ Bar by Law360 and SuperLawyers by Thompson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.’s Board of Directors (pending court approval), as well as $420 million from Teva Pharmaceutical Ind. Ltd.
If you incurred losses in Teradata, you are encouraged to fill out the form below to get more information and speak with an attorney about your rights.
Why is TDC being Sued?
Teradata is an enterprise software company that provides database and analytics-related software, products, and services. Two of the most important financial metrics that Teradata reports to investors are its total annual recurring revenue (“ARR”) and cloud ARR.
The complaint alleges that Teradata and certain of its senior officers made materially false and misleading statements to investors related to: (a) the success of the company’s recently expanded business model to market products to customers beyond their IT units; (b) the robustness of the company’s pipeline and ability to timely close deals; and (c) the company’s revenue growth prospects.
The complaint further alleges that, in reality, Teradata’s expanded business model caused significant delays in the closing of large customer transactions. As a result, it is alleged that the company overstated the health of its pipeline and revenue growth prospects.
BFA is also investigating whether Teradata misrepresented and concealed that several of its most important customers decided years ago to terminate their relationships with the company.
The Stock Declines as the Truth is Revealed
Investors allegedly began to learn the truth on December 7, 2023, when Teradata revealed that certain large deals could be delayed. On this news, the price of Teradata stock declined by $2.89 per share, or 6%, to close at $43.40 per share on December 7, 2023.
Then, on February 12, 2024, Teradata announced that “deal timing issues” caused the company to miss its previously issued ARR guidance. CEO Stephen McMillan explained that, because “Teradata is becoming even more strategic to corporations and touching all levels of [its] customers’ organizations,” there were “more executive decision makers” required to close these deals and that “[t]hese dynamics cause[d] a number of transactions to move into 2024,” each of which “were worth $2 million or more of cloud ARR growth.”
Also on February 12, 2024, Teradata announced disappointing ARR and cloud ARR guidance for 2024, which the company blamed on the loss of “a few large on-prem[ises]” customers to competitors’ cloud services. Significantly, Teradata stated that these “customer decisions . . . were made more than 3 years ago” and “we have known that these erosions were contemplated for some time.”
Investment analysts questioned why the company had not previously disclosed the loss of customers. For instance, on Teradata’s February 12, 2024 earnings call, a Citigroup analyst stated, “I think many of us on the call were not expecting that, but it sounds like you’ve been expecting that for a while.” Additionally, an analyst with Guggenheim wrote in a report dated February 12, 2024 that, “Management said these decisions were made years ago . . . We can’t help but think that this should have already been baked into forecasts.” Likewise, an analyst with Craig-Hallum Capital Group LLC wrote in a February 13, 2024 report, “[w]e are scratching our heads” at the fact the company knew it would lose these customers but did not disclose it.
On this news, the price of Teradata stock declined by $10.57 per share, or 22%, to close at $38.22 per share on February 13, 2024.
Roughly six weeks later, on April 5, 2024, Teradata announced the immediate departure of its Chief Revenue Officer.
Finally, on May 6, 2024, Teradata reported worse than expected ARR and cloud ARR growth for the first quarter of 2024 which the company blamed on cloud “migrations and expansions” that were “slightly below our expectations” and more slippage of deals from 2023.
On this news, the price of Teradata stock declined by $5.24 per share, or 14%, to close at $32.72 per share on May 7, 2024.
The lawsuit seeks to recover compensatory monetary damages for investors sustained because of Teradata’s alleged wrongdoing.
I Suffered Losses, What Should I Do?
If you suffered losses from your investment in Teradata, you should fill out the form below to speak with an attorney about your rights.
All representation is on a contingency fee basis. Shareholders are not responsible for any court costs or expenses of litigation. The Firm will seek court approval for any potential fees and expenses.
You can also contact:
Ross Shikowitz
ross@bfalaw.com
212-789-3619
Why Bleichmar Fonti & Auld LLP?
BFA is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It was named among the Top 5 plaintiff law firms by ISS SCAS in 2023 and its attorneys have been named Titans of the Plaintiffs’ Bar by Law360 and SuperLawyers by Thompson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.’s Board of Directors (pending court approval), as well as $420 million from Teva Pharmaceutical Ind. Ltd.