The Law Offices of Frank R. Cruz Announces the Filing of a Securities Class Action on Behalf of Talkspace, Inc. (TALK, TALKW) Investors

LOS ANGELES--(BUSINESS WIRE)--The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Talkspace, Inc. (“Talkspace” or the “Company”) (NASDAQ: TALK, TALKW) common stock as of the record date for the June 17, 2021 special meeting to consider approval of the merger between Hudson Executive Investment Corporation (“HEIC”) and Talkspace (the “Merger”) and entitled to vote on the Merger (the “Class”). Talkspace investors have until March 8, 2022 to file a lead plaintiff motion.

If you are a shareholder who suffered a loss, click here to participate.

On May 28, 2021, Talkspace and HEIC issued a proxy statement soliciting votes in favor of the Merger. Following stockholder approval, the Merger was consummated on June 22, 2021.

On August 9, 2021, Talkspace announced its second quarter 2021 financial results, including “elevated customer acquisition cost, due mainly to a material increase in the cost of digital advertising.” Then, on November 15, 2021, Talkspace announced third quarter 2021 financial results that “came in below expectations management shared with investors on [its] last earnings call.” Also on November 15, 2021, the Company’s Chief Executive Officer, Oren Frank, and Head of Clinical Services, Roni Frank, resigned.

By December 30, 2021, the price of Talkspace common stock was trading below $2 per share, 80% below the price shareholders would have received if they had redeemed their shares instead of approving the Merger less than one year earlier.

The complaint filed alleges that the proxy statement was materially misleading because it failed to disclose to investors that: (1) Talkspace was experiencing significantly increased online advertising costs in its business-to-consumer ("B2C") channel since the start of 2021; (2) Talkspace was experiencing lower conversion rates in its online advertising in its B2C business; (3) Talkspace was experiencing increased customer acquisition costs and more tepid B2C demand than represented to investors; (4) Talkspace was suffering from ballooning customer acquisition costs and worsening growth and gross margin trends; (5) Talkspace had overvalued its accounts receivables from certain of its health plan clients in its business-to-business channel, which amounts required adjustment downward; and (6) as a result of the foregoing, Talkspace’s 2021 financial guidance was not achievable and lacked any reasonable basis in fact.

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If you purchased Talkspace common stock as of the record date for the June 17, 2021 special meeting, you may move the Court no later than March 8, 2022 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Talkspace common stock as of the record date for the June 17, 2021 special meeting, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to [e-mail], or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.

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