NEW YORK--(BUSINESS WIRE)--Labaton Sucharow LLP (“Labaton Sucharow”) announces that on April 4, 2022, it filed a securities class action lawsuit, captioned Sylebra Capital Partners Master Fund Ltd v. Everbridge, Inc., No. 2:22-cv-2249 (N.D. Cal.) (the “Action”), on behalf of its clients Sylebra Capital Partners Master Fund Ltd, Sylebra Capital Parc Master Fund, and Sylebra Capital Menlo Master Fund (together, the “Sylebra Funds”) against Everbridge, Inc. (“Everbridge” or the “Company”) and certain Everbridge officers and directors (collectively, “Defendants”). The Action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and SEC Rule 10b-5 promulgated thereunder, on behalf of all persons or entities who purchased or otherwise acquired Everbridge common stock between November 4, 2019 and February 24, 2022, both dates inclusive (the “Class Period”), who were damaged thereby (the “Class”).
Everbridge is a software company that provides enterprise software applications to automate and accelerate organizations’ operational response to “critical events” in order to keep people safe and organizations running. These critical events include public safety threats, information technology outages, cyber-attacks, product recalls, and supply-chain interruptions. Shortly before and throughout the Class Period, Everbridge engaged in a buying spree, acquiring nine separate companies.
The Action alleges that, throughout the Class Period, Defendants misled investors by: (1) failing to disclose that Everbridge was experiencing integration problems with respect to these acquisitions; (2) using the revenues from these acquisitions to mask increasingly stagnant organic growth; and (3) failing to disclose that the COVID pandemic was having a material impact on the size of the deals that Everbridge was able to obtain, with a negative effect on the Company’s revenue growth.
The truth regarding Everbridge’s failed growth strategy was partially revealed through a press release issued on December 9, 2021. On that date, the Company disclosed that Defendant David Meredith had unexpectedly resigned as Everbridge’s CEO. The Company also provided 2022 revenue growth guidance of between 20-23%, well below the expected baseline of 30%. On this news, Everbridge’s common stock price fell almost by half, a price decline of $52.37 per share, or 45.4 percent, to close at $63.00 per share on December 10, 2021.
Then, on February 24, 2022, the full truth was revealed. On that date, Everbridge announced its financial results for the fourth quarter and full year 2021, as well as its guidance for the first quarter and full year 2022. As to revenue, the Company guided only 20% growth in the first quarter of 2022 and a scant 15-17% growth for the full year, even lower than the disappointing guidance previously issued in December 2021.
Further, in the related earnings call that same day, the new interim co-CEO, Vernon Irvin, disclosed for the first time, despite prior representations to the contrary, that “these products and businesses” obtained from Everbridge’s buying binge “have created incremental product line complexity that produce integration challenges and have complicated our go-to-market efforts.” He also stated that Everbridge will pause engaging in any new M&A activity to focus on product integration, as well as significantly “simplify” and reduce its product offerings.
Defendant Patrick Brickley, the other interim co-CEO and CFO, stated that the focus on product integration and simplification would alone result in an approximate $17 million of revenue loss. Brickley also disclosed that the decline in deal sizes “has been exacerbated by lingering effects of COVID,” and that it would result in another $15 million reduction in revenues. On all this news, Everbridge’s common stock price fell another $15.68 per share, or 33.9 percent, to close at $30.61 per share on February 25, 2022.
As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common stock, Plaintiff and other Class members have suffered significant losses and damages.
If you purchased Everbridge common stock during the Class Period and were damaged thereby, you are a member of the “Class” and may be able to seek appointment as Lead Plaintiff. Lead Plaintiff motion papers must be filed with the U.S. District Court for the Northern District of California no later than June 3, 2022. The Lead Plaintiff is a court-appointed representative for absent members of the Class. You do not need to seek appointment as Lead Plaintiff to share in any Class recovery in the Action. If you are a Class member and there is a recovery for the Class, you can share in that recovery as an absent Class member. You may retain counsel of your choice to represent you in the Action.
If you would like to consider serving as Lead Plaintiff or have any questions about this lawsuit, please contact David J. Schwartz, Esq. of Labaton Sucharow, using the toll-free number (800) 321-0476, or via email at david@labaton.com.
The Sylebra Funds are represented by Labaton Sucharow, which represents many of the largest pension funds in the United States and internationally with combined assets under management of more than $2 trillion. Labaton Sucharow has been recognized for its excellence by the courts and peers, and it is consistently ranked in leading industry publications. Offices are located in New York, NY, Wilmington, DE, and Washington, D.C. More information about Labaton Sucharow is available at www.labaton.com.
You can view a copy of the complaint here.
