Bragar Eagel & Squire, P.C. Reminds Investors That Class Action Lawsuits Have Been Filed Against Tesla, DLocal, Cognyte, and Dutch Bros and Encourages Investors to Contact the Firm

NEW YORK, March 22, 2023 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Tesla, Inc. (NASDAQ: TSLA), DLocal Ltd (NASDAQ: DLO), Cognyte Software Ltd. (NASDAQ: CGNT), Dutch Bros Inc. (NYSE: BROS). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.

Tesla, Inc. (NASDAQ: TSLA)

Class Period: February 19, 2019 - February 17, 2023

Lead Plaintiff Deadline: April 28, 2023

Tesla designs and manufactures electric vehicles, battery energy storage, solar panels and roof tiles, and related products and services. Tesla is headquartered in Austin, Texas and incorporated in Delaware. The Company’s common stock trades on the Nasdaq Stock Market (“NASDAQ”) under the ticker symbol “TSLA”.

In 2014, Tesla announced Tesla Autopilot (“Autopilot”), a suite of purportedly advanced driver-assistance system (“ADAS”) features including automated lane-centering, traffic-aware cruise control, lane changes, semi-autonomous navigation, and self-parking. In September 2014, all Tesla cars started shipping with the sensors and software necessary to support the Autopilot system. Since then, the Company has touted refinements and enhancements to the Company’s ADAS and Autopilot features, including so-called “Full Self-Driving” (“FSD”) software, which purportedly enables Tesla vehicles to drive autonomously to a destination entered in the car’s navigation system.

Throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Defendants had significantly overstated the efficacy, viability, and safety of the Company’s Autopilot and FSD technologies; (ii) contrary to Defendants’ representations, Tesla’s Autopilot and FSD technologies created a serious risk of accident and injury associated with the operation of Tesla vehicles; (iii) all the foregoing subjected Tesla to an increased risk of regulatory and governmental scrutiny and enforcement action, as well as reputational harm; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.

On April 18, 2021, media outlets reported that a Tesla vehicle with “no one” driving it had crashed into a tree, killing two passengers near Houston, Texas in a “fiery” crash. A Harris County Precinct constable told local news station KPRC 2 that the investigation showed “no one was driving” the 2019 Tesla vehicle when the accident occurred.

On this news, Tesla’s stock price fell $25.15 per share, or 3.4%, to close at $714.63 per share on April 19, 2021.

On August 16, 2021, media outlets reported that the National Highway Traffic Safety Administration (“NHTSA”) had opened a formal investigation into Tesla’s Autopilot system after a series of collisions with parked emergency vehicles. The scope of the investigation included 765,000 vehicles, or nearly every vehicle that Tesla has sold in the U.S. since the start of the 2014 model year.

On this news, Tesla’s stock price fell $31.00 per share, or 4.32%, to close at $686.17 per share on August 16, 2021.

On June 3, 2022, media outlets reported that NHTSA had issued a formal inquiry to Tesla about the Autopilot and FSD features for certain models of its vehicles after receiving complaints from more than 750 owners of the vehicles about sudden and unexpected braking with no immediate cause.

On this news, Tesla’s stock price fell $71.45 per share, or 9.22%, to close at $703.55 per share on June 3, 2022.

On January 27, 2023, media outlets reported that the SEC was investigating statements made by Tesla and its Chief Executive Officer (“CEO”), Defendant Elon R. Musk (“Musk”), concerning the Autopilot system, including whether Musk made inappropriate forward-looking statements regarding the Autopilot system.

On this news, Tesla’s stock price fell $11.24 per share, or 6.32%, to close at $166.66 per share on January 30, 2023.

On February 16, 2023, media outlets reported that NHTSA had ordered a recall of nearly 363,000 Tesla vehicles equipped with the Company’s FSD “Beta” software, stating that the software may allow the equipped vehicles to act “in an unlawful or unpredictable manner,” increasing the risk of a crash.

On this news, Tesla’s stock price fell $12.20 per share, or 5.69%, to close at $202.04 per share on February 16, 2023.

Then, on February 18, 2023, media outlets reported that a Tesla vehicle had crashed into a fire truck that was responding to an earlier accident, killing the driver and injuring a passenger and four firefighters. News reports linked the crash with prior reports of Tesla vehicles crashing into stationary emergency vehicles as a consequence of poorly performing ADAS technologies, increasing market and public concerns regarding the Autopilot system in Tesla’s vehicles.

On this news, Tesla’s stock price fell $10.94 per share, or 5.25%, to close at $197.37 per share on February 21, 2023, the next trading day.

As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common stock, Plaintiff and other Class members have suffered significant losses and damages.

For more information on the Tesla class action go to: https://bespc.com/cases/TSLA

DLocal Ltd (NASDAQ: DLO)

Class Period: In connection with the June 2021 IPO

Lead Plaintiff Deadline: May 1, 2023

DLocal, which conducted its IPO in New York and trades on the NASDAQ under the ticker symbol “DLO,” connects global merchants to emerging markets, earning revenues from fees charged to merchants in connection with payment processing services for cross-border and local payment transactions.

In June 2021, Defendants (defined below) commenced DLocal’s IPO, issuing over 33.8 million shares at $21.00 per share, including the full exercise of the Underwriter Defendants’ (defined herein) option to purchase additional shares, all pursuant to the Registration Statement.

Among other things, the Registration Statement repeatedly touts DLocal’s supposed “growing and deepening relationships” with new and existing global merchant clients. The Registration Statement tells prospective investors that DLocal measures its success by means of its “cohort” performance in terms of TPV, or total payment volume, and offers historic TPV data to support the narrative that DLocal has a strong track record. In addition, the Registration Statement advises prospective investors that a remediation plan designed to improve the Company’s internal controls over financial reporting is being implemented, assuring the market that DLocal is serious about its internal controls over financial reporting.

The Registration Statement’s numerous representations about DLocal’s TPV and its internal controls over financial reporting, however, contained untrue statements of material fact and omitted to state material facts both required by governing regulations and necessary to make the statements made not misleading. Specifically, the Registration Statement misrepresents the TPV derived from new merchants in DLocal’s 2019 and 2020 cohorts, which, at the time of the IPO, were severely lower than what the Registration Statement reported, as well as the fact that the remediation plan DLocal implemented before the IPO was patently defective and, thus, incapable of improving the Company’s internal controls over financial reporting.

When the truth regarding the Company’s TPV and internal controls reached the market, DLocal’s common stock cratered over 50%. All told, investors have lost hundreds of millions of dollars.

For more information on the DLocal class action go to: https://bespc.com/cases/DLO

Cognyte Software Ltd. (NASDAQ: CGNT)

Class Period: February 2, 2021 - June 28, 2022

Lead Plaintiff Deadline: May 1, 2023

On December 16, 2021, after the market closed, Meta, the parent company of Facebook and Instagram, issued a “Threat Report,” which included the results of its “months long” investigation into the “surveillance-for-hire industry,” revealing for the first time that Cognyte (along with six private companies) regularly targeted, without their knowledge, journalists, dissidents, critics of authoritarian regimes, families of opposition, and human rights activists around the world, and collected intelligence on these people by manipulating them to reveal information and/or by compromising their devices and accounts, in violation of Facebook’s “multiple community standards and Terms of Service.” In particular, the Threat Report revealed that Cognyte “sells access to its platform which enables managing fake accounts across social media platforms including Facebook, Instagram, Twitter, YouTube, and VKontakte (VK), and other websites to social-engineer people and collect data.” This conduct “violated multiple Community Standards and Terms of Service,” and “given the severity of their violations,” Meta disabled Cognyte’s ability to use its platforms (removing about 100 accounts on Facebook and Instagram), shared is findings with security researchers, other platforms, and policymakers, issued Cease and Desist warnings, and alerted the nearly 50,000 individuals (across 100 countries) who were believed to be targeted to help them strengthen the security of their accounts.

On this news, the price of Cognyte’s common stock fell 5.11%, closing on December 17, 2021, at $18 per share, before declining another 5.5% the next trading day. By December 22, 2021, Cognyte’s stock had fallen to trade at $15 per share, representing a decline of nearly 21%.

Then, on April 5, 2022, Cognyte issued its Annual Report on Form 20-F for the period ended January 31, 2022 (the “2021 Annual Report”), revealing that the Company was forced to modify its solutions in response to the Threat Report, stating in relevant part:

Our solutions capture, fuse and analyze data collected from various sources, including from commercial web sources and social platforms. Such sources and platforms may allege that our solutions and techniques for capturing and collecting data and information from such sources violate their terms of use or other propriety rights of such sources or of their users. In December 2021, Meta Platforms Inc., or Meta, issued a report alleging that certain solutions offered by us that interface with Facebook and Instagram platforms violate their terms of use. Concurrently with the issuance of the foregoing report, Meta announced that it had removed accounts that it claimed were associated with our solutions and requested we cease data collection from its social platforms. In response to Meta’s allegations, we made modifications to certain features of our solutions, which impacted the manner our customers can use these solutions. Any allegations that our solutions and techniques infringe the terms of use or rights of third parties may result in legal claims against us or our customers. These claims may damage our reputation, adversely impact our customer relationships and create liability for us.

On the same day it published its 2021 Annual Report, Cognyte reported its fourth quarter 2021 financial results, representing the period during which Facebook disrupted and disabled Cognyte’s use of its platforms for purposes of reconnaissance. Cognyte badly missed analyst consensus estimates for non-GAAP earnings per share and sales, and significantly undershot the midpoint of its guidance range by several millions of dollars, citing in the Company’s accompanying press release “lower conversions within [its] product pipeline,” among other macroenvironmental challenges. Specifically, the Company’s non-GAAP earnings of $0.16 per share were not only down significantly from the $0.36 per share it earned in the year-ago quarter but also $0.06 per share below analysts’ expectations of $0.22 per share. Similarly, Cognyte’s sales of $124.9 million, representing a less than 1% increase from the year-ago period, also came significantly below analysts’ consensus estimate of $129.6 million.

The response from analysts was swift with many reducing their price targets, including Wedbush, who lowered their price target from $17 to $9 and concluded: [T]he Cognyte business model is turning into a debacle of [ ] epic proportions for investors that once believed in the story. Since the spin-off from Verint over the past year, the Cognyte story ha[s] been a nightmare for investors as the execution shortfalls, longer sales cycles, and myriad of challenges has created a perfect storm for the Street. Most troubling to us is that CGNT was unable to guide for 1Q23 and 2023, which means to us that management may not have their arms around the sales execution and headwinds in our opinion.

The market also responded immediately and harshly. Cognyte’s stock price plummeted over 31% on unusually high trading volume, closing at $8.03 per share on April 5, 2022, which was down $3.63 per share from its April 4, 2022 close of $11.66 per share.

Then, on June 28, 2022, Cognyte released its first quarter 2022 financial results, which, once again, badly missed analyst estimates across the board. Cognyte’s 1Q22 revenue of $87 million, for example, represented a decline of 25%. Analysts were expecting a decline of 2%.

In response, analysts immediately downgraded the Company’s rating and reduced their price targets. William Blair, for example, downgraded Cognyte to “market perform” and concluded that Cognyte’s “low pipeline conversion” issues were a symptom of a broader problem, stating in relevant part:

Cognyte’s brand has been negatively impacted by increased scrutiny of the cyber intelligence industry and fellow Israel cyber surveillance firm NSO Group. Last fall, the U.S. government blacklisted the NSO Group after a multitude of reports surfaced that its software was being used inappropriately by governments to spy on citizens with dissenting views. While we believe there is value to cyber intelligence we believe that it is important for investors and customers that there are rigid safeguards in place and high transparency to ensure that the software is used in an ethical manner.

On this news, Cognyte’s shares declined $1.84, or over 28.66%, to close at $4.58 per share.

For more information on the Cognyte class action go to: https://bespc.com/cases/CGNT

Dutch Bros Inc. (NYSE: BROS)

Class Period: March 1, 2022 - May 11, 2022

Lead Plaintiff Deadline: May 1, 2023

Dutch Bros operates and franchises drive-thru coffee shops. The Company also sells and distributes coffee and coffee-related products and accessories. The Company claims that as of March 31, 2022, it had 572 shops in operation in 12 U.S. states, of which 310 were company-operated and 262 were franchised.

On March 1, 2022, two-thirds of the way through the Company’s first quarter of 2022, Dutch Bros held a conference call to discuss its fourth quarter and full year 2021 results. On the call, Defendants made numerous statements reassuring investors that the Company’s first quarter 2022 results would be positive, and in particular that the Company’s margins were healthy. For example, Defendant Jonathan “Joth” Ricci (“Ricci”), the Company’s Chief Executive Officer (“CEO”) stated that, while Dutch Bros is “not immune to margin pressures,” the Company was “managing it appropriately” and that “we are feeling good as we enter ‘22 with the trajectory of our margins, given everything going on.” Defendant Charles L. Jemley (“Jemley”), the Company’s Chief Financial Officer (“CFO”) similarly stated “we’re just not feeling compression in margins.”

However, on May 11, 2022, after the market closed, the Company issued a press release announcing poor financial results for the first quarter of 2022. Therein, the Company reported a net loss of $16.3 million, compared to a net loss of $4.8 million for the first quarter of 2021. The Company also reported an adjusted net loss of $2.5 million (a loss of $0.02 per share), which fell below the Street’s estimated earnings of $0.01 per share.

The same day, the Company held a conference call to discuss the Company’s first quarter 2022 results. To explain the Company’s poor performance, Defendant Ricci pointed to Dutch Bros’ margins, stating:

[M]argin pressure on our company shops led to a lower adjusted EBITDA result than we expected. That margin pressure was primarily a result of these factors: our decision to be disciplined on the price we took, which we believe is less than half as much as many of our peers; faster inflation and cost of goods, especially in dairy; the pull forward of deferred expenses related to the maintenance of shops; and normal new store inefficiency amplified by the volume of new and ramping units in quarter 1.

Defendant Ricci further explained: “we did not perceive the speed and magnitude of cost escalation within the quarter. Dairy, for example, which makes up 28% of our commodity basket, rose almost 25% in Q1.”

On this news, Dutch Bros’ share price fell $9.26, or 26.9%, to close at $25.11 per share on May 12, 2022, thereby injuring investors.

During the Class Period, Defendants made materially false and/or misleading statements, and failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company was experiencing increased costs and expenses, including on dairy; (2) that, as a result, the Company was experiencing increased margin pressure and decreased profitability in the first quarter of 2022; and (3) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.

For more information on the Dutch Bros class action go to: https://bespc.com/cases/BROS

About Bragar Eagel & Squire, P.C.:

Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.

Contact Information:

Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
[email protected]
www.bespc.com