Adobe Inc. has once again prevailed in court after a Manhattan federal judge refused to let investors revive a proposed class action accusing the software giant of misleading shareholders about competition from Figma Inc. ahead of its abandoned $20 billion acquisition.
U.S. District Judge John G. Koeltl ruled Friday that the investors’ latest bid to amend their complaint “recites exactly the same alleged false and misleading statements” as their previously dismissed filing — merely adding a new set of claims that still fail to meet the legal bar.
Court Rejects “Market Illusion” Argument
The investors’ fresh theory centered on Adobe’s total addressable market (TAM) — an estimate of potential revenue if the company captured its entire market. They argued Adobe had inflated this figure by including Figma’s market segment, misleading shareholders about its growth prospects.
Judge Koeltl, however, dismantled that reasoning.
“The plaintiffs’ argument fails because it erroneously assumes that Adobe’s TAM estimates reflect the share of the market Adobe might actually capture,” he wrote.
The judge pointed to Adobe’s 2018 revenue of $9 billion against a projected TAM of $128 billion for 2022, saying no “reasonable investor” would interpret that as Adobe claiming it could capture ten times its revenue within four years.
