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MINDBODY, Inc. Class Action Lawsuit

18 days left to seek lead plaintiff status

Case Summary

Company Name
MINDBODY, Inc.
Stock Symbol
MB
Class Period
November 7, 2018 to February 15, 2019
Motion Deadline
November 5, 2019
Court
Southern District of New York

On September 6, 2019, the MINDBODY, Inc. class action lawsuit was filed alleging violations of the Securities Exchange Act of 1934.  The MINDBODY class action lawsuit was commenced in the United States District Court for the Southern District of New York on behalf of all former owners of MINDBODY Class A common stock who sold shares, and were damaged thereby, during the period from November 7, 2018 through February 15, 2019 (the “Class Period”) and is captioned Walleye Trading LLC v. MINDBODY, Inc., No. 1:19-cv-08331. 

MINDBODY provides cloud-based business management software for the wellness services industry, e.g., salons and spas, and the rapidly growing marketplace for wellness services.In early 2018, MINDBODY underwent several successful acquisitions.  Following these acquisitions, investors were repeatedly assured that MINDBODY was on track to successfully integrate the companies and that the acquisitions offered a substantial value proposition for MINDBODY.  Unknown to investors, however, was the fact that in the latter half of 2018, MINDBODY’s CEO, defendant Richard L. Stollmeyer, had been in discussions with Vista Equity Partners Management, LLC (“Vista”) concerning a potential sale of MINDBODY.  The MINDBODY Board of Directors only became aware of these discussions between Stollmeyer and Vista in late October 2018, when it convened to discuss Vista’s interest in MINDBODY.

The MINDBODY class action lawsuit alleges that, on November 6, 2018, defendants intentionally issued disappointing guidance for MINDBODY’s 2018 fourth quarter in order to artificially depress the price of MINDBODY’s stock, attributing the lowered guidance to integration issues with MINDBODY’s early 2018 acquisitions.  The market, which had previously been informed that the integrations were on track, reacted poorly, causing the price of MINDBODY Class A common stock to fall by approximately 20% on November 7, 2018.

On December 24, 2018, defendants announced that MINDBODY’s Board had approved a merger agreement with Vista.  Pursuant to the agreement, holders of MINDBODY common stock would receive $36.50 in cash for each share owned, with Vista taking MINDBODY private upon completion.  Defendants touted this as a 68% premium to MINDBODY’s December 21, 2018 closing price, which was still depressed by the surprising and suspiciously timed negative guidance issued on November 6, 2018.  However, unknown to MINDBODY investors, by January 18, 2019, defendants knew that MINDBODY’s fourth quarter 2018 results had materially exceeded not only current analyst estimates, but also those estimates issued prior to the disappointing November 6, 2018 guidance.

During January and February 2019, defendants issued proxy materials urging MINDBODY shareholders to vote “FOR” the transaction, touting the price of $36.50 per share as a substantial premium for MINDBODY shareholders.  These proxy materials, however, failed to include information regarding MINDBODY’s “meaningful” fourth quarter 2018 results, disclosure of which was necessary for investors to make an informed decision regarding the proposed transaction.  As a consequence, on February 14, 2019, MINDBODY shareholders approved the transaction and received $36.50 per share for each MINDBODY share owned.  As a result of these material misrepresentations and omissions, MINDBODY shareholders were misled into selling their shares for less than the fair value of the shares, which was greater than $36.50 per share.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased MINDBODY Class A common stock during the Class Period to seek appointment as lead plaintiff in the MINDBODY class action lawsuit.  A lead plaintiff will act on behalf of all other class members in directing the MINDBODY class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the MINDBODY class action lawsuit.  An investor’s ability to share in any potential future recovery of the MINDBODY class action lawsuit is not dependent upon serving as lead plaintiff.  If you wish to serve as lead plaintiff of the MINDBODY class action lawsuit or have questions concerning your rights regarding the MINDBODY class action lawsuit, please provide your information here or contact counsel, Brian E. Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at bcochran@rgrdlaw.com.  Lead plaintiff motions for the MINDBODY class action lawsuit must be filed with the court no later than November 5, 2019.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation.  With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history.  For six consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements.  Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims.  Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide.  Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.

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