SAP SE Investors Lawsuit

Investigation

Continous Holding
October 10, 2019 to October 23, 2020

Proposed Claim
Securities Violation

Investigation regarding SAP’s management statements late 2019 about the company’s shift in strategy to conquer the cloud business. Notably, statements regarding the company’s ability to turn increased demand in subscriptions to cloud-based services’ profitability. In October 2020, SAP cut the revenue forecast, blaming an expected new wave of lockdowns, and issuing a profit and sales warning. As Anurag Rana, analyst at Bloomberg Intelligence stated “given that Workday and Salesforce.com had good quarters with healthy pipelines, it seems that could be losing share to pure-play cloud vendors, which would make it hard for them to attain any meaningful recovery in the near-term.” Was “Resiliency, profitability and sustainability” just a motto or did the motto fail to be translated quick enough?

Main Event

Eine katastrophe

10/26/2020

SEC Filing

SAP cut the revenue forecast, blaming an expected new wave of lockdowns, and issuing a profit and sales warning. Cloud backlog was up 10% year over year to €6.60 billion amid continued COVID-19 effects on SAP’s cloud business. Cloud revenue grew 11% year over year to €1.98 billion (IFRS). Continued lower transactional revenues, particularly in Concur, negatively impacted cloud growth by 6 percentage points. Software licenses revenue was down 23% year over year to €0.71 billion (IFRS). Cloud and software revenue was down 2% year over year to €5.54 billion (IFRS). Total revenue was down 4% year over year to €6.54 billion (IFRS).

Various analysts reported on the potential impact of said warning on the overall industry. While Bloomberg [link] – interviewed salesforces.com’s Chief Executive Officer Marc Benioff who assured investors that the issues we proper to SAP.

Anurag Rana, analyst at Bloomberg Intelligence stated “the bigger surprise to us was the sharp deceleration in [SAP’s] cloud backlog numbers.” “Given that Workday and Salesforce.com had good quarters with healthy pipelines, it seems that could be losing share to pure-play cloud vendors, which would make it hard for them to attain any meaningful recovery in the near-term.”

The stock impact compares the closing price immediately preceding the date of the event and the following closing price. The price difference also reflects the overall mix of information.

Stock Impact