Dropbox, Inc. (NASDAQ: DBX)

A class action lawsuit has been filed on behalf of investors who purchased Dropbox, Inc. (“Dropbox”) (NASDAQ: DBX) common stock. The lawsuit alleges that certain Dropbox executive officers fraudulently misled investors, causing Dropbox’s stock price to fall by more than 12.8% in one day after the truth emerged. The lawsuit seeks to recover monetary damages for Dropbox investors, with all litigation costs and expenses covered by Murphy Law Firm.
Investor Information

Dropbox completed its initial public offering (“IPO”) on March 23, 2018. The lawsuit alleges that defendants made materially false and misleading statements in the offering documents to investors by highlighting the purported rapid pace of Dropbox’s revenue growth leading up to the IPO, while failing to disclose worsening revenue trends and competitive platforms that were negatively impacting the company’s business. Among other things, defendants misleadingly touted that Dropbox’s “revenue was $603.8 million, $844.8 million, and $1,106.8 million in 2015, 2016, and 2017, respectively, representing an annual growth rate of 40% and 31%, respectively” and further claimed that “the need for [the Dropbox] platform will continue to grow as teams become more fluid and global, and content is increasingly fragmented across incompatible tools and devices.” In truth, at the time of the IPO, Dropbox was tracking below its internal revenue and monetization targets and was already experiencing heightened pressures on its revenue growth as competitors such as Amazon, Microsoft, and Google had launched alternative products at competitive price points. Dropbox’s inability to monetize its massive user base had also materially impaired its revenue growth trends, as the company’s reliance on self-service subscriptions, lack of a significant sales force, and dependence on individual users to grow revenues meant that the vast majority of its registered user base could not be converted to paying users to continue to accelerate revenue growth. When Dropbox announced its disappointing second quarter revenues (resulting from the aforementioned undisclosed factors), the price of Dropbox stock fell 12.8% in a single trading day, closing at $18.71 per share compared to the prior day’s closing price of $21.46 per share.

To join the lawsuit, please provide your information above, or to discuss your rights regarding this class action, please contact A. Brooke Murphy, Esq. at abm@murphylegalfirm.com or (405) 389-4989.