Cases
Slack Technologies, Inc. (NYSE: WORK)
Securities Class Action
Overview
Overview
- Date:
- 9/20/2019
- Case Caption:
- Fiyyaz Pirani v. Slack Technologies, Inc., et al
- Stock Symbol:
- WORK
- Status:
- Pending
- Court:
- U.S. Court of Appeals: Ninth Circuit
NEW YORK, September 20, 2019 – Bragar Eagel & Squire, P.C. announces that a class action lawsuit has been filed in the United States District Court for the Northern District of California on behalf of all investors that purchased Slack Technologies, Inc. (NYSE: WORK) securities pursuant to and/or traceable to the company’s June 2019 initial public offering (“IPO”).
On June 20, 2019, the company filed its prospectus with the SEC, which forms part of the Registration Statement. The company registered for the resale of up to 118,429,640 shares of Class A common stock by registered shareholders at a reference price of $26.00. According to the Registration Statement, the resale of the company’s stock was not underwritten by any investment bank and the registered stockholders would purportedly elect whether to sell their shares. Such sales, if any, would be brokerage transactions on the New York Stock Exchange (“NYSE”), and Slack would purportedly not receive any proceeds from the sale of shares of Class A common stock by the registered stockholders.
On September 4, 2019, Slack reported its second-quarter fiscal 2019 results and guidance for the third quarter, expecting a wider loss than analysts predicted. On this news, the Company’s share price fell $3.69 per share, nearly 12%, over two consecutive trading sessions to close at $27.38 per share on September 6, 2019.
By the time this class action complaint was filed, Slack’s stock traded as low as $25.72 per share, a significant decline from the $26.00 per share reference price for the Offering.
The complaint, filed on September 19, 2019, alleges that the Registration Statement was false and misleading and omitted to state material adverse facts. Specifically, defendants failed to disclose to investors: (1) that the company’s Slack Platform was susceptible to recurring service-level disruptions; (2) that such disruptions were increasingly likely to occur as the company scaled its services to a larger user base; (3) that the company provides credits even if a customer was not specifically affected by service-level disruptions; (4) that, as a result, any service-level disruptions would have a material adverse impact on the company’s financial results; and (5) that, as a result of the foregoing, Defendants’ positive statements about the company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
For more information, please contact Lawrence P. Eagel.
Updates:
On June 20, 2019, the company filed its prospectus with the SEC, which forms part of the Registration Statement. The company registered for the resale of up to 118,429,640 shares of Class A common stock by registered shareholders at a reference price of $26.00. According to the Registration Statement, the resale of the company’s stock was not underwritten by any investment bank and the registered stockholders would purportedly elect whether to sell their shares. Such sales, if any, would be brokerage transactions on the New York Stock Exchange (“NYSE”), and Slack would purportedly not receive any proceeds from the sale of shares of Class A common stock by the registered stockholders.
On September 4, 2019, Slack reported its second-quarter fiscal 2019 results and guidance for the third quarter, expecting a wider loss than analysts predicted. On this news, the Company’s share price fell $3.69 per share, nearly 12%, over two consecutive trading sessions to close at $27.38 per share on September 6, 2019.
By the time this class action complaint was filed, Slack’s stock traded as low as $25.72 per share, a significant decline from the $26.00 per share reference price for the Offering.
The complaint, filed on September 19, 2019, alleges that the Registration Statement was false and misleading and omitted to state material adverse facts. Specifically, defendants failed to disclose to investors: (1) that the company’s Slack Platform was susceptible to recurring service-level disruptions; (2) that such disruptions were increasingly likely to occur as the company scaled its services to a larger user base; (3) that the company provides credits even if a customer was not specifically affected by service-level disruptions; (4) that, as a result, any service-level disruptions would have a material adverse impact on the company’s financial results; and (5) that, as a result of the foregoing, Defendants’ positive statements about the company’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
For more information, please contact Lawrence P. Eagel.
Updates:
- On January 8, 2020, the Court appointed Bragar Eagel & Squire, P.C., as Lead Counsel to prosecute the claims on behal of the the Class.
- On April 21, 2021, the Court denied in part Defendants' Motion to Dismiss the First Amended Complaint.
- Defendants took an immediate appeal of the order denying their motion to dismiss. On September 20, 2021, the United States Court of Appeals for the Ninth Circuit affirmed the District Court's order.