RADNOR, Pa.--(BUSINESS WIRE)--The law firm of Kessler Topaz Meltzer & Check, LLP reminds that an investor securities fraud class action lawsuit has been filed against Slack Technologies, Inc. (NYSE: WORK) (“Slack”) on behalf of those who purchased or otherwise acquired Slack’s Class A common stock pursuant and/or traceable to Slack’s registration statement and prospectus (collectively, the “Registration Statement”) for the resale of up to 118,429,640 shares of its Class A common stock whereby Slack began trading as a public company on or around June 20, 2019.
Slack investors who purchased securities during the Class Period may, no later than November 18, 2019, seek to be appointed as a lead plaintiff representative of the class.
Investors who wish to discuss this securities fraud class action lawsuit or request additional information about this litigation are encouraged to contact Kessler Topaz Meltzer & Check attorneys James Maro, Jr. or Adrienne Bell at (844) 887-9500 (toll free) or online at: ktmc.com/newcases/slack.
According to the complaint, Slack offers a business technology platform that allows users to share and aggregate information from other software, take action on notifications, and advance workflows in a multitude of third-party applications.
On June 20, 2019, Slack filed its prospectus on a Form 424B4 with the SEC, which forms part of the Registration Statement. Slack 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 Slack’s stock was not underwritten by any investment bank and the registered stockholders would purportedly elect whether or not to sell their shares.
According to the complaint, on September 4, 2019, Slack reported its second-quarter fiscal 2019 results and issued guidance for the third quarter, expecting a wider loss than analysts predicted. In a press release, Slack stated, in part, “Revenue was negatively impacted by $8.2 million of credits related to service level disruption in the quarter.” On a conference call to discuss the results, Stewart Butterfield, Slack’s Chief Executive Officer, stated that the disruptions were attributable, at least distantly, to issues with scaling Slack’s services to encompass a greater user-load.
Following this news, Slack’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.
The complaint alleges that the Registration Statement was false and misleading and omitted to state material adverse facts. Specifically, the defendants failed to disclose to investors that: (1) Slack’s platform was susceptible to recurring service-level disruptions; (2) such disruptions were increasingly likely to occur as Slack scaled its services to a larger user base; (3) Slack provides credits even if a customer was not specifically affected by service-level disruptions; (4) as a result, any service-level disruptions would have a material adverse impact on Slack’s financial results; and (5) as a result of the foregoing, the defendants’ positive statements about Slack’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
Slack investors may, no later than November 18, 2019, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, or other counsel. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not impacted by whether or not you decide to serve as a lead plaintiff. Communicating with any counsel is not necessary to share in any recovery achieved in this case. Any member of the purported class may move the Court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
Kessler Topaz Meltzer & Check prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check. For more information about Kessler Topaz Meltzer & Check, please visit www.ktmc.com.