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Vertiv Holdings Co.

Case Details

Class Period: February 24, 2021 - February 23, 2022
Date Filed: March 24, 2022
Case Number: 1:22-cv-3572
Jurisdiction: Southern District of New York
icon-casetype Case Type: Securities Case

Case Summary

The action asserts claims for violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 (the “Securities Act”), and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5, promulgated thereunder against Vertiv Holdings Co. (“Vertiv” or the “Company”) and certain of the Company’s officers, members of Vertiv’s Board of Directors, including the directors that signed the offering materials for the Company’s secondary public offering of Class A common stock conducted on or around November 4, 2021 (the “SPO”), the Selling Shareholders, and the underwriters of the SPO (collectively, “Defendants”).

Based in Columbus, Ohio, Vertiv designs, manufactures, and services critical digital infrastructure technologies and life-cycle services for data centers, communication networks, and commercial and industrial environments. Vertiv’s offerings include power management products, thermal management products, integrated rack systems, modular solutions, and management systems for monitoring and controlling digital infrastructure that are integral to the technologies used for various services.

The complaint alleges that, in the offering materials issued in connection with the SPO and throughout the Class Period, Vertiv made numerous false and misleading representations concerning the extent of its pricing visibility, which had a significant impact on company margins. Moreover, Vertiv directly tied its positive financial guidance to its pricing mechanisms.

The complaint also alleges that the Company had internal-control issues related to their sales practices leading to excessive discounting in order to secure sales; the Company labeled this a cultural issue. In addition, the complaint alleges that the Company represented reoccurring costs as one-time occurrences.

The truth began to emerge on February 23, 2022, when Vertiv released its fourth quarter and full-year earnings report for 2021. Adjusted operating income was reported at 43% below the low end of management’s own guidance range — a vast departure from constructive management commentary throughout the entire fourth quarter of 2021. As a result of these disclosures, the price of Vertiv stock declined by $7.19 per share, or over 36% (from $19.57 per share to $12.38 per share on February 23, 2022, alone). Despite these disclosures, however, Vertiv downplayed the significance of the miss and provided investors with false assurances about the strength of the Company’s forecasted revenues and growth prospects.

On June 22, 2022, the Court appointed Louisiana Sheriffs’ Pension & Relief Fund, Orlando Police Pension Fund, City of Plantation General Employees Retirement System, Riviera Beach Municipal Firefighters’ Pension Trust Fund, and City of Riviera Beach General Employees’ Retirement System as Lead Plaintiff and Saxena White as Lead Counsel.

On September 16, 2022, Lead Plaintiff filed an amended consolidated complaint. Defendants’ motion to dismiss the amended consolidated complaint is due on January 20, 2023.