Slack Technologies, Inc. (Nasdaq: WORK)
A class action has been filed in the United States District Court for the Northern District of California on behalf of purchasers of Slack Technologies, Inc. (Nasdaq: WORK) securities pursuant to the June 20, 2019 offering, (the “Class Period”).
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 went public through the offering of more than 140 million shares of its Class A common stock with a reference price of $26.00 per share (the “Offering”). On the first day of trading, the price of Slack stock reached a high of $42 per share.
The Slack class action lawsuit alleges that the registration statement and prospectus issued in connection with the Offering (collectively, the “Registration Statement”) was false and misleading and omitted to state material adverse facts about Slack’s business and prospects. Specifically, defendants failed to disclose that Slack’s platform was susceptible to recurring service-level disruptions, which were increasingly likely to occur as Slack scaled its services to a larger user base, and that, pursuant to its customer contracts, Slack had agreed to provide credits to customers if its service availability dropped below 99.99%, even if a customer was not specifically affected by a service disruption. As a consequence, any service-level disruptions to Slack’s platform would have a material adverse impact on Slack’s financial results.
On June 28, 2019, Slack’s platform suffered a global service outage that disrupted service for many of its users. On July 29, 2019, Slack’s platform suffered another outage that disrupted service to more than 2,000 users.
On September 4, 2019, Slack reported its second quarter 2019 financial results and issued guidance for the third quarter of 2019, announcing that Slack was expecting a wider loss than analysts had predicted. Slack also stated that revenue in the quarter had been “negatively impacted by $8.2 million of credits related to service level disruption in the quarter.” On this news, Slack’s share price fell $3.69 per share, or nearly 12%, over two consecutive trading sessions, to close at $27.38 per share on September 6, 2019, representing a decline of nearly 35% from the $42 per share the stock was trading at on the day of the Offering.
If you are a current shareholder and/or purchased stock pursuant to the June 20, 2019 offering and would like to discuss your options of exercising your rights as a shareholder, please contact us.
Please submit the following information so we can determine if you qualify for the suit. If you don't know all the specific details, partial information is also acceptable.