b'were not sufficiently aware of the problem. Finally, themodernizing cloud-based applications. Its flagship court found that even viewing plaintiffs allegationsproduct is Pivotal Application Service (PAS), and in holistically, they failed to create a sufficient inference ofFebruary 2018, Pivotal made a new product, Pivotal scienter because the allegations were not tethered toContainer Service (PKS), commercially available. PKS any individual defendant. allows customers to more easily deploy and operate Kubernetes, an open-source system designed for managing containerized workloads and services. The court further rejected plaintiffs attemptOn or about April 20, 2018, Pivotal filed its final Registration Statement with the SEC, followed by the to allege scienter by relying on the corecompletion of its IPO on April 24, 2018. The Registration operations doctrine rejecting plaintiffsStatement included an overview of its products, business operations, financial results, and almost argument that because fees were a significantforty pages of risk disclosuresoverall, promoting portion of the companys revenue, defendantsthe companys leading and turnkey cloud-native platform, claiming it combine[d] the latest innovations must have been aware of what the FTCfrom open-source projects and integrated PCF was investigating. The court found that thewith Kubernetes. The Registration Statement also emphasized the Companys sales and customer doctrine did not apply because the issuesuccess model, noting that it work[s] closely with large of hidden fees did not fall within one of thepublic cloud providers[.] Thereafter, during a January 2019 conference call and June 2018 to March 2019 rare circumstances where the nature of thequarterly earnings reports and calls, the company made relevant fact would have been so significantvarious positive statements regarding superiority and adoption of its products. Then, on June 4, 2019, Pivotal that it would be absurd that officersreported its first quarter 2020 financial results, advising and executives at the company were notthat it closed fewer deals thanexpected in Q1 due to sales execution and a complex technology landscape sufficiently aware of the problem. that is lengthening [Pivotals] sales cycle. It also lowered its going-forward fiscal year 2020 revenue guidance from $798 million-$806 million to $756 million-767 million. The next day, Pivotals share price fell over 40% The court did grant leave to amend in part, explainingfrom $18.54 per share to $10.89 per share.that because the second amended complaint wasInvestors filed a putative class action lawsuit against predicated on a new theory of liability, the court wouldPivotal, its officers, directors, and IPO underwriters, follow the well-established Ninth Circuit practice toalleging violations of Sections 11, 12(a)(2), and 15 of freely give leave to amend with respect to that claimthe 1933 Act based on allegedly false and misleading alone. Plaintiffs notified the court on July 27, 2020 that itstatements in the Registration Statement, and of would not file a third amended complaint and judgmentSections 10(b) and 20(a) of the 1934 Act based on was entered thereafter. Plaintiffs appealed the caseallegedly false and misleading statements made after to the U.S. Court of Appeals for the Ninth Circuit inthe IPO. Defendants moved to dismiss the consolidated August 2020 (Case No. 20-16603), which is fully briefedamended complaint, which the court granted, with and the court is considering dates in August 2021 forleave to amend, holding that plaintiffs failed to oral argument.adequately plead falsity and scienter.First, the court granted Pivotals motion to dismiss the In re Pivotal Securities Litigation, Case No.Section 11 and 12(a)(2) claims for failing to plausibly allege 3:19-cv-03589-CRB (N.D. Cal. July 21, 2020)a false or materially misleading statement based on three Reduced Guidance Due to Lengtheningdefects in the complaint: (a) plaintiffs did not establish Sales Cycle contemporaneous falsity, (b) many of the statements were inactionable corporate optimism, and (c) Pivotal did not Pivotal is a San Francisco-based information technologyhave a duty to disclose the allegedly omitted information.and software company founded in 2013. PivotalAs to plaintiffs failure to sufficiently plead falsity, the court provides a cloud-native application platform, Pivotaladdressed statements in the Registration Statement about Cloud Foundry (PCF), as well as strategic services.Pivotals products, competition, and risk disclosures. First, The companys platform enables software developersthe court rejected plaintiffs claim that statements about to accelerate and streamline their processes forPivotals product offerings were misleading because 29'