United States District Court, S.D. New York
ANDREW D. NGUYEN, Individually and on Behalf of All Others Similarly Situated, Plaintiff,
MAXPOINT INTERACTIVE, INC. et al., Defendants.
MEMORANDUM OPINION AND ORDER
TAYLOR SWAIN United States District Judge.
Interactive, Inc. (“MaxPoint, ” or the
“Company”) made an initial public offering of
common stock in March 2015. In this putative class lawsuit
brought against MaxPoint, several of its executive officers
and directors (the “Individual Defendants, ”
together with MaxPoint, “Company Defendants”),
and underwriters (the “Underwriter Defendants, ”
together with Company Defendants, “Defendants”),
Lead Plaintiff Phil Lifschitz (“Plaintiff”),
alleging that MaxPoint's Registration Statement omitted
material information, asserts a claim under Section 11 of the
Securities Act, 15 U.S.C. §77k, against all Defendants;
a claim under Section 12(a)(2) of the Securities Act, 15
U.S.C. §77l(a)(2), against MaxPoint, certain of the
Individual Defendants, and the Underwriter Defendants; and a
claim under Section 15 of the Securities Act, 15 U.S.C.
§77o, against MaxPoint and the Individual Defendants.
The Court has jurisdiction of this action pursuant to 28
U.S.C. § 1331.
the Individual Defendants and, separately, the Underwriter
Defendants, have moved to dismiss the First Amended Complaint
(“FAC”). The Court has reviewed all of the
parties' submissions carefully. For the following
reasons, the motions to dismiss the FAC are granted.
otherwise noted, the following facts are taken from the FAC
and are assumed to be true for the purposes of this motion
founded in 2006, offers business intelligence and marketing
automation software service designed to enable national
brands to drive local, in-store sales. (FAC ¶ 18.) The
Company's customers consist primarily of national retail,
consumer products, automotive, restaurant, healthcare, and
entertainment brands that use its software platform to
predict the most likely local buyers of a specific product at
a particular retail location and then execute cross-channel
digital marketing campaigns to reach these buyers.
(Id. ¶ 19.) MaxPoint sells its advertising
services solution directly to customers and through
advertising agencies. (Id. ¶ 24.) The Company
defines “enterprise customers” as those customers
who have spent more than $10, 000 with it during a trailing
twelve-month period. (See id.)
about July 2, 2014, MaxPoint filed with the SEC a draft
Registration Statement on Form S-1, which would later be
utilized for the IPO following several amendments made in
response to comments received from the SEC. (Id.
¶ 25.) On March 5, 2015, the SEC declared the
Registration Statement effective. (Id.) On or about
March 6, 2015, MaxPoint and the Underwriter Defendants priced
the IPO and filed the final Prospectus for the IPO, which
forms part of the Registration Statement (including the
Prospectus, the “Registration Statement” or
Registration Statement on page 6, under the subheading
“Risks Related to Our Business, ” stated,
• If we are unable to attract new customers or our
existing customers do not allocate a greater portion of their
marketing spend to us, our revenue growth will be adversely
• We have historically relied, and expect to continue to
rely, on a small number of customers for a significant
portion of our revenue, and the loss of any of these
customers may significantly harm our business, results of
operations and financial condition.
Registration Statement, beginning on Page 13, under the
heading “Risk Factors” and subheading
“Risks Related to Our Business and Industry, ”
further stated, inter alia:
Our limited operating history makes it difficult to evaluate
our business and prospects and may increase the risks
associated with your investment.
We commenced operations in 2006 and, as a result, have only a
limited operating history upon which our business and future
prospects may be evaluated. Although we have experienced
substantial revenue growth in recent years, we may not be
able to sustain this rate of growth or even maintain our
current revenue levels. We have encountered and will continue
to encounter risks and ...