Unity Software Inc.

Investigation
05/10/2022

Initial Lawsuit
07/06/2022

Lawsuit Progression
09/05/2022

Investigation

Continous Holding
March 5, 2021 to May 10, 2022
Proposed Claim
Securities Violation

Did Unity Software Inc. (U) mislead investors regarding the accuracy of its machine learning technology, notably its Audience Pinpointer tool?

This post is open for investors to gather facts, and findings and track their exposure to related lawsuits. We invite investors and shareholders to contribute to this investigation for their own benefit, add events to the factual timeline below and vote on events’ pertinence.

A lawsuit was subsequently filed. We will update this post as it unfolds.

Main Event

Q1 2022 Conference Call

05/10/2022

Company Statement

During the conference call, executives explained the slow-down in revenue from its Operate segment:

“Operate started the year strong in January, but then significantly slowed down in February and March . . . While there are external factors to consider, the Operate challenge is mostly caused by internal factors in Unity monetization in an otherwise healthy market. We see these challenges as temporary and not structural and do not expect them to impact future prospects of our business beyond 2022. The most succinct framing for the challenges we are facing is that we built more for growth and less for resiliency. Following years of rapid growth and working through the challenges of Apple’s privacy changes, we got hit hard by two issues.

The first was a fault in our platform that resulted in reduced accuracy for our Audience Pinpointer tool, a revenue expensive issue given that our Pinpointer tool experienced significant growth post the IDFA changes. The second is that we lost the value of a portion of our data, training data due in part to us ingesting bad data from a large customer. We estimate the impact to our business of approximately $110 million in 2022 with no carryover impact to 2023. Luis will provide a more granular update to our guidance in a few minutes.”

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

Close	Previous close	Price variation	Percentage variation
$30.3	$48.13	$-17.83	-37.05%

See more on Factual Timeline

Initial Lawsuit

First Complaint - 07/06/2022

A Unity Software Inc. (U) shareholder filed a federal securities class action on behalf of a class consisting of all persons and entities (other than the listed defendants) that purchased or otherwise acquired Unity securities between March 5, 2021 and May 10, 2022, both dates inclusive.

Filing Date
07/06/2022
Class Period
03/05/2021 to 05/10/2022
Transgression
Securities Violation
Filing Firms
Pomerantz LLP
Case Title
Das v. Unity Software Inc.
Docket Number
5:22-cv-03962
Court
California Northern District Court
Free File
Complaint

Allegations

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors that:

(i) deficiencies in Unity’s product platform reduced the accuracy of the company’s machine learning technology;
(ii) the foregoing was likely to have a material negative impact on the company’s revenues;
(iii) accordingly, Unity had overstated the company’s commercial and/or financial prospects for 2022;
(iv) as a result, the company was likely to have to reduce its fiscal 2022 guidance; and
(v) as aresult, the company’s public statements were materially false and misleading at all relevant times.