Slack Technologies, Inc. Class Action Lawsuit
- Company Name
- Slack Technologies, Inc.
- Stock Symbol
- Class Period
- Purchasers of Slack Class A common stock pursuant to the June 20, 2019 offering
- Motion Deadline
- November 18, 2019
- Northern District of California
On September 19, 2019, the Slack Technologies, Inc. class action lawsuit was filed charging Slack and certain of its officers and directors with violations of the Securities Act of 1933. The Slack class action lawsuit was commenced in the Northern District of California on behalf of purchasers of Slack Class A common stock pursuant to the June 20, 2019 offering and is captioned Dennee v. Slack Technologies, Inc., 3:19-cv-05857.
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.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Slack Class A common stock pursuant to the Offering to seek appointment as lead plaintiff in the Slack class action lawsuit. A lead plaintiff will act on behalf of all other class members in directing the Slack class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Slack class action lawsuit. An investor’s ability to share in any potential future recovery of the Slack class action lawsuit is not dependent upon serving as lead plaintiff. If you wish to serve as lead plaintiff of the Slack class action lawsuit or have questions concerning your rights regarding the Slack 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 email@example.com. Lead plaintiff motions for the Slack class action lawsuit must be filed with the court no later than November 18, 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.