b'statement was in response to a question concerningReidinger v. Zendesk, Inc., et al., Case No. Apples business trajectory. Similarly, the court held19-cv-06968-CRB, 2020 WL 6562335 that the China-related statements were false when(N.D. Cal. Nov. 9, 2020); 2021 WL 796261 made given that the CEO subsequently admitted in(Mar. 2, 2021) an interview that Apple was seeing emerging market pressure in China on November 1, 2018, noting, amongLower Historical Growth In Non-U.S. Markets other things, that signs of the deceleration of ChinasAnd Data Breach economy were particularly bad in November. Thus, the court concluded that defendants China-relatedZendesk, Inc. is a software company that offers scalable statements were actionable. customer service products for businesses to conduct sales, customer support, and engagement. Throughout Second, the court held that plaintiff did not adequately2018 and 2019, Zendesk continued to grow and achieve allege that defendants statement that [t]he X[S] andstrong financials. In February 2019, Zendesk announced X[S] Max got off to a really great start was false orits fiscal year 2018 results, noting it had strong misleading. Critically, the court reasoned that plaintiffdemand for its products globally in 2018, growth in nowhere alleged that the iPhones XS and XS Max2018 reflects the strength of our products, our ability did not launch successfully in September, noting into execute, and global trends that are driving demand contrast that defendants reported a new September [w]ith customers in more than 160 countrieswe are quarter record, fueled by . the very successful launchseeing strong global demand and revenue growth in of both phones, during the November 1, 2018 call.every region, and that it matured enterprise sales and Accordingly, the court dismissed plaintiffs claimsbroadened sales and customer success capabilities. predicated on purportedly misleading statementsZendesks CFO attributed Zendesks performance concerning iPhone demand.to the sales force executing and productivity up all Finally, the court held plaintiff adequately pled scienteraround; strength in our Americas business, particularly based on the combination of the core operationswith bigger deals this quarter. and a healthy demand doctrine (China presented an important marketenvironment overall[.] She further noted [w]ere for Apple to which the CEO paid close attention),not seeing our pipeline slip in any way. Zendesk post-class admissions that defendants saw worryingalso commented on Europe, Middle East, and Africa signs in China during the quarter, and the close(EMEA) growth, noting we employ the same kind temporal proximity between the challenged statementsof go-to-market motions in all the regions. EMEA has and actions inconsistent with those statements,had a very strong presence across all business sizes. including cutting production lines and admitting aLater that month, Zendesk stated that it was adapting $9 billion shortfall two months later. In sum, the courtas it began to pursue more enterprise accounts by held that plaintiffs allegations supported a strongputting in the people and activities in place to make inference that on November 1, 2018: (1) the CEO knewthat happen, including dedicating its sales reps that economic deceleration and trade tensions in Chinato a specific enterprise and making sure that they posed a significant risk to Apples business, (2) Appleunderstand the terminology that those companies use possessed data that such risks were materializing in theand the concerns that they would have. The following form of troubling signs and weak iPhone demand, andmonth, Zendesk announced a new managing director (3) the CEO nevertheless represented to investors thatfor the Australia-New Zealand (ANZ) subregion of Asia Apple was not experiencing pressure in China. ThosePacific (APAC) and with this addition, it was poised for inferences in turn plausibly supported that defendantsgrowth in the ANZ mission-critical market. acted with at least deliberate recklessness. DefendantsIn April 2019, Zendesk again announced positive argued that plaintiffs theory of fraud did not makegrowth and financials for 1Q 2019, noting demand for sense because defendants did not profit from theour products remains strong as companies around the alleged fraud, pointing to the fact that Apple engagedworld, large and small, seek to transform their businesses in a $1 billion stock repurchase at supposedly inflatedby adopting modern software[.] Zendesk attributed prices. The court dismissed that argument, however,broad-based growth in 1Q 2019, in part, to improved holding that plaintiff did not need to allege defendantssales and marketing, and global trends that are driving motive at the pleading stage and that, as shareholders,high demand and touted the expansion of its leadership the CEO and CFO stood to benefit from a stockoperations to support global growth and momentum. buy-back even if the company did not.On a conference call with investors that same day, Defendants answered on November 18, 2020. PlaintiffsZendesks CFO described 1Q 2019 as reflecting strong deadline to move for class certification is May 5, 2021.and balanced revenue growth across all regions. She Fact and expert discovery are set to close in March 2022remarked that if theres a place where Im paying attention and July 2022, respectively. Dispositive motions are dueto, particularly in APAC, thats a place were looking at. But by September 9, 2022. A trial date has not been set. other than that, I dont think theres anything different. 45'