| COMPANY |
DigitalOcean Holdings, Inc. |
| COURT |
United States District Court for the Southern District of New York |
| CASE NUMBER |
23-cv-08060 |
| JUDGE |
The Hon. Jed S. Rakoff |
| CLASS PERIOD |
February 16, 2023 and August 25, 2023 |
| SECURITY TYPE |
Securities |
DigitalOcean investors may receive additional information about the case by clicking the link "Submit Your Information" above. If you are a member of the class described below, you may no later than November 13, 2023 move the Court to serve as lead plaintiff of the class, if you so choose.
A class action lawsuit has been filed on behalf of those who purchased or acquired DigitalOcean Holdings, Inc. (“DigitalOcean”) (NYSE: DOCN) securities between February 16, 2023 and August 25, 2023, both dates inclusive (the “Class Period”).
Case Background:
After the market closed on August 3, 2023, DigitalOcean announced quarterly financial results and disclosed that the company's previously issued financial statements for the period ending March 31, 2023 should no longer be relied on due to accounting errors that resulted in an overstatement of the company's income tax expense in the quarter of approximately $18 million. As a result, DigitalOcean would be restating its first quarter 2023 financials and announced that the restatement would "also include disclosure of an identified material weakness and that our disclosure controls and procedures were not effective as of March 31, 2023."
On this news, DigitalOcean's stock price dropped approximately 24.8% in intraday trading the following day on August 4, 2023.
Then on August 24, 2023, DigitalOcean issued a press release announcing that the company's board of directors had begun a search for a new CEO to replace their existing CEO, who would step down as CEO and board member as soon as his successor was appointed.
On this news, DigitalOcean's stock price declined $2.65 per share, or approximately 8.4%, to close at $28.86 per share on August 25, 2023.
The complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company's business, operations, and prospects. Specifically, Defendants misled investors by failing to disclose that: (1) Defendants lacked the skills and experience to assess complicated tax matters and therefore did not design or maintain effective controls over the company's accounting for income taxes; and (2) as a result of the foregoing, Defendants' financial statements were inaccurate and materially misleading.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: Jonathan Naji, Esq. (484) 270-1453 or via e-mail at info@ktmc.com. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.