Freshworks Inc. Class Action Lawsuit - FRSH
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The Freshworks class action lawsuit seeks to represent purchasers or acquirers of Freshworks Inc. (NASDAQ: FRSH) common stock issued in connection with Freshworks’ initial public offering (“IPO”). Captioned Sundaram v. Freshworks Inc., No. 22-cv-06750 (N.D. Cal.), the Freshworks class action lawsuit charges Freshworks, certain of its top executives and directors, as well as the IPO’s underwriters with violations of the Securities Act of 1933.
If you suffered substantial losses and wish to serve as lead plaintiff of the Freshworks class action lawsuit, please provide your information in the form on this page. You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at firstname.lastname@example.org. Lead plaintiff motions for the Freshworks class action lawsuit must be filed with the court no later than January 3, 2023.
CASE ALLEGATIONS: Freshworks provides customer engagement software for businesses. On or about September 22, 2021 Freshworks conducted its IPO, offering 28.5 million shares of its common stock to the investing public at a price of $36 per share.
According to the IPO’s offering documents, Freshworks’ business had “grown rapidly” in the lead up to the IPO and Freshworks observed “broad appeal of [its] products to customers of all sizes and geographies.” Consequently, Freshworks’ growth rates and purportedly “healthy” net dollar retention rates reached levels not previously achieved, and there was no indication that either was decelerating. But as the Freshworks class action lawsuit alleges, unbeknownst to investors, Freshworks’ revenue growth and billings had encountered obstacles at the time of the IPO.
On February 10, 2022, Freshworks reported flat calculated billings growth (of 41% when normalized for early renewals and reserve activity) and revenue growth deceleration (of only 44% year over year). On this news, Freshworks’ stock price dropped approximately 18%.
Then, on May 3, 2022, Freshworks reported a third quarter of decelerating revenue growth and billings that missed consensus estimates and declined 13% quarter over quarter. Analysts responded by reducing their Freshworks stock price targets. For example, on May 4, 2022, after characterizing the quarter as “mixed” and highlighting how Freshworks’ revenue growth has “decelerat[ed]” three consecutive quarters, including during the period within which Freshworks went public, JMP Securities LLC dropped its price target from $41 to $29. On this news, Freshworks’ stock price fell an additional 5.7% over two days.
By the time the Freshworks class action lawsuit was filed, Freshworks stock traded as low as $10.51 per share, or nearly 70% below the $36 IPO offering price.
THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any purchaser or acquirer of Freshworks common stock issued in connection with the IPO to seek appointment as lead plaintiff in the Freshworks class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Freshworks class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Freshworks class action lawsuit. An investor’s ability to share in any potential future recovery of the Freshworks class action lawsuit is not dependent upon serving as lead plaintiff.
ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: Robbins Geller Rudman & Dowd LLP is one of the world’s leading complex class action firms representing plaintiffs in securities fraud cases. The Firm is ranked #1 on the 2021 ISS Securities Class Action Services Top 50 Report for recovering nearly $2 billion for investors last year alone – more than triple the amount recovered by any other plaintiffs’ firm. With 200 lawyers in 9 offices, Robbins Geller is one of the largest plaintiffs’ firms in the world and the Firm’s attorneys have obtained many of the largest securities class action recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig.