A class action lawsuit was filed against Perion Network (NASDAQ:PERI) on April 16, 2024. The plaintiffs (shareholders) alleged that they bought PERI stock at artificially inflated prices between February 9, 2021 and April 5, 2024 (Class Period) and are now seeking compensation for their financial losses. Investors who bought PERI stock during that period can click here to learn about joining the lawsuit.
Perion Network is a global technology company that offers monetizable digital advertising solutions, creative intelligence, unique data, and smart technology to its customers. Its suite of business solutions includes Codefuel, Vidazoo, Undertone, and Hivestack.
The plaintiffs maintain that Perion Network and three of its current and/or former senior officers deceived investors by omitting truthful information about the company’s business prospects, mainly about Perion’s search advertising business during the Class Period. Importantly, the plaintiffs complain that the defendants omitted truthful information about Perion’s search advertising business, the company’s relationship with Microsoft (NASDAQ:MSFT), and ancillary issues, from SEC filings and related material.
The truth became clear on April 8, when Perion issued its preliminary financial results for Q1 FY24 and drastically slashed its full-year Fiscal 2024 guidance. Perion stated that in Q1, the company witnessed a decline in search advertising activity owing to “changes in advertising pricing and mechanisms implemented by Microsoft Bing in its Search Distribution marketplace.” These led to a “reduction in Revenue Per Thousand Impressions (RPM) for both Perion and other Microsoft Bing distribution partners” and impacted search volume.
Interestingly, during the Class Period, Perion consistently reiterated the robust expansion of its search engine business, which drove revenue growth. Moreover, the ex-CEO stated during an earnings call that Perion was one of the most trusted vendors for Microsoft and that the tech giant intended to extend the agreement with Perion with new terms.
As per the class action lawsuit, Perion Network caused its stock to trade at artificially inflated prices by knowingly and recklessly misleading investors about the company’s business prospects during the Class Period.
Notably, on April 8, PERI stock cratered 40.8%, causing massive damage to shareholders’ returns.
