Pluralsight is a provider of cloud-based and video training courses for employees such as software developers, IT administrators, and creative professionals. The Company completed its initial public offering (“IPO”) in May 2018, whereby it sold 23.8 million shares at a price of $15.00 per share. Less than a year later, Pluralsight completed a secondary public offering (“SPO”) on March 6, 2019, whereby it sold 15.6 million shares at a price of $29.25 per share, for gross proceeds of over $450 million. The SPO served as a massive cash-out for Pluralsight insiders, as all the proceeds went to insiders and related parties; and conversely none of the money was raised to fund corporate developments or initiatives.
Throughout the Class Period, Pluralsight misrepresented the Company’s business outlook, particularly related to the Company’s salesforce and its ability to generate strong growth in billings. Specifically, the Company failed to disclose that Pluralsight was experiencing substantial delays in hiring and properly training the salesforce necessary to meet its lofty billing projections. In addition, the Company knew at the time of the SPO that it was behind schedule onboarding new sales representatives, which was hurting the Company’s sales execution and preventing Pluralsight from meeting its high growth projections. Instead of disclosing such facts at the time of the SPO, and to cash-out at inflated prices, Defendants intentionally obscured and omitted this pertinent information from investors.