According to the Complaint, this is a federal securities action on behalf of a class consisting of all persons who purchased or otherwise acquired Switch Class A common stock pursuant to and/or traceable to the Company’s initial public offering commenced on or around October 6, 2017 (the “IPO” or the “Offering”) seeking to recover damages caused by Defendants’ violations of Sections 11, 12 and 15 of the Securities Act of 1933 (“Securities Act”).
The Complaint alleges that Defendants made false and/or misleading statements and/or failed to disclose that: (1) Switch’s Grand Rapids and Atlanta facilities would never be as profitable as its Las Vegas facility, diminishing the yield on Switch’s recent capital expenditures acquiring and building out those facilities will bear; (2) Switch’s high capital expenditures to create high redundancy levels at its facilities were not as profitable as they once had been in the past; (3) Switch had already spent an additional more than $64 million on unbudgeted capital expenditures during the third quarter of 2017 that was not disclosed to investors until after the IPO; (4) Switch recognized $9.4 million in revenues during FY17 that it would not provide colocation services for until FY18, meaning its reported FY17 revenue growth and its FY18 revenue prospects were both overstated; (5) eBay, Switch’s largest colocation customer, would not be taking possession of colocation space it had reserved at Switch’s Tahoe/Reno facility in early 2018; and (6) as a result of the foregoing, at the time of the IPO, Switch’s business and financial prospects were not what defendants had led the market to believe they were in the Registration Statement. When the true details entered the market, the lawsuit claims that investors suffered damages.
On August 6, 2018, the Court issued an Order transferring this case to the United States District Court for the District of Nevada. On September 6, the Court issued an Order appointing Lead Plaintiff and Counsel. Lead Plaintiff filed an amended Complaint on October 12. Defendants filed a Motion to Dismiss the amended Complaint on November 19. On July 12, 2019, the Court issued an Order granting in part and denying in part Defendants' Motion to Dismiss. On December 20, Defendants filed a Motion for Judgment on the pleadings. On July 10, 2020, the Court granted Defendants' Motion for Judgment and dismissed the case with prejudice.