DigitalOcean Holdings, Inc.
Investors that purchased the Company’s securities and have suffered a loss, please fill in transaction information below, or email to info@portnoylaw.com.
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CONTACT:
Portnoy Law Firm
Lesley F. Portnoy, Esq.,
www.portnoylaw.com
Office: 310.692.8883
1800 Century Park East, Suite 600
Los Angeles, CA 90067
info@portnoylaw.com
According to the allegations in the Complaint, DigitalOcean is categorized as an emerging growth company, and it claims to provide a cloud computing platform primarily tailored for small to medium-sized businesses lacking the necessary resources to maintain on-premise software development environments. DigitalOcean’s customer base utilizes its platform for various purposes, including the development of web and mobile applications, website hosting, and e-commerce, among other uses.
On August 3, 2023, DigitalOcean made an announcement stating that it had “discovered specific errors within the unaudited condensed consolidated financial statements for the quarter ended March 31, 2023, as presented in our Quarterly Report on Form 10-Q for the three months ended March 31, 2023, filed on May 9, 2023.” These errors pertained to the company’s accounting for income tax expenses, resulting in an overstatement of income tax expenses for the quarter, amounting to approximately $18 million. The company also disclosed that it would be revising its financial statements for the first quarter of 2023 and that this revision would include the acknowledgment of a significant weakness in internal controls, indicating that its disclosure controls and procedures were not effective as of March 31, 2023.
Subsequently, on August 24, 2023, DigitalOcean issued a press release announcing that the Board of Directors had initiated a search for a new CEO to replace Defendant Yancy Spruill. Spruill would resign as CEO and as a board member upon the appointment of his successor.
Following this news, DigitalOcean’s stock price experienced a decline of $2.65 per share, representing an approximate 8.4% decrease, ultimately closing at $28.86 per share on August 25, 2023.
