b'claims and failed to plead a material misrepresentationTV but it was ultimately unsuccessful. In particular, the or omission (and that one claim was time barred) for thecourt held that [w]hile Defendants optimism may have 1933 Act claims. On August 18, 2020, the court grantedproven to be unwarranted, Plaintiffs have not alleged that the motion, but permitted plaintiffs to seek leave to file aDefendants reviewed any contemporaneous information second amended complaint.that should have undermined the optimism in their With respect to the 1934 Act claims, the court first heldstrategies. Furthermore, general allegations attributed that the majority of the challenged statements wereto confidential witnesses about an investigation into non-actionable puffery. Among plaintiffs twenty-fivesales practices and that 100 of 260,000+ employees did challenged statements, the court distilled a few factualnot lead to an inference that the individual defendants assertions that were potentially actionable, but that itknew of fraudulent sales practices. Finally, the court gave ultimately determined were not, namely statementsshort shrift to the core operations doctrine, explaining that (i) DTVN subscriptions yielded positive margins;that [c]ourts within and beyond this circuit have cast (ii) subscribers predominantly enrolled online; (iii) thedoubt on the continued viability of the doctrine, which reported subscription numbers reflected real customerspre-dates the PSLRA by several years and courts in and not fraudulently created accounts; (iv) subscriberthis circuit have generally invoked the doctrine only to churn was being reduced; and (v) DTVN subscriptionsbolster other evidence of scienter, rather than relying on were offsetting losses in satellite TV customers. First,it as an independently sufficient basis. Thus, because the court determined that plaintiffs failed to allege thatthe court held that the amended complaint lacked statements regarding DTVNs margins were false orany other allegations of scienter, it rejected the core misleading because plaintiffs relied on alleged statementsoperations doctrine.from a single confidential witness who was not alleged toThe court similarly dismissed plaintiffs 1933 Act claims have access to nationwide cost and profit data to supportbecause plaintiffs did not adequately allege any material this claim. Second, the court disagreed that statementsmisstatement or omission, rejecting plaintiffs allegation that DTVN subscribers could and did enroll online andthat AT&Ts Offering Document were misleading because through low-cost means were misleading even if manydefendants failed to disclose unprofitability and the use customers enrolled in stores, explaining that the onlyof aggressive promotional sales tactics, explaining that plausible conclusion from the statements is that DTVN, asthese allegations were virtually identical to plaintiffs 1934 an internet-based TV platform, did not require installationAct claims, without any additional facts, and thus are of a satellite dish, a visit from a technician, or the need forequally inactionable. The court further held that, even if a set-top box, which meant DTVN growth was not subjectnews articles relied on exclusively by plaintiffs regarding to traditional physical constraints and costs; this wastechnical problems with DTVN were true, plaintiffs failed to true irrespective of some customers enrolling in physicalallege that the technical problems were material and thus stores. Third, though the court accepted as true plaintiffsshould have been disclosed in the Offering Documents.claim that some sales associates created accountsOn September 25, 2020, plaintiffs sought leave to file a without customers knowledge, plaintiffs failed to plausiblysecond amended complaint, which defendants opposed. allege the practice was widespread and thus material toThe motion is now fully briefed and remains pending.a reasonable investor because none of the confidential witnesses on whom plaintiffs relied had a companywide view of the business. Fourth, the court rejected plaintiffsIn re Mindbody, Inc. Securities Litigation, challenges to statements that customer churn rate wasCase No. 19-CV-8331, 489 F. Supp. 3d 188 declining in May 2017, because plaintiffs failed to allege(S.D.N.Y. Sept. 25, 2020) any contradictory facts and a drop in subscriber growth in 3Q 2018 smacks of hindsight. Fifth, the court reasonedPrivatization Allegedly Tainted that, given plaintiffs deficient pleading as to profit marginsBy Self-Interestand churn, the challenged statements regarding DTVNMindbody, Inc. is a software company that provides subscriptions offsetting losses in satellite TV customersbusiness management and payment software to were equally unavailing.approximately 67,000 fitness and beauty businesses, The district court also rejected plaintiffs theory ofsuch as gyms and yoga studios. In early 2018, scienter, holding that plaintiffs allegation that the failureMindBody acquired FitMetrix, Inc., which helps gyms of DTVN would undermine the Time Warner acquisitiontrack customer data across locations, and Booker and damage defendants personal reputations failed toSoftware Inc., a competitor, for $150 million. During the demonstrate a remotely possible, personalized motive tocompanys first quarter 2018 earnings call in May 2018, defraud, and that plaintiffs other circumstantial evidencethe CEO described efforts to integrate the software and was not as compelling as the obvious, non-culpablepersonnel of the acquired companies as a nontrivial explanation that AT&T invested heavily in DTVN andmatter, and said that, even though efforts will begin believed it could have been the next generation ofalmost immediately, the hope was to exit 2018 with a 73'