On March 5, 2024, Lyft, Inc. was sued for violations of the federal securities laws in the United States District Court for the Northern District of California on behalf of on behalf of a “Class” of all persons who purchased or otherwise acquired Lyft common shares on a U.S. open market during the class period February 13, 2024 at 4:05 p.m. through February 13, 2024 at 4:51 p.m. (the “Class Period”).
Recent Security Class Actions
On March 4, 2024, RealNetworks, Inc. was sued for violations of the federal securities laws in the United States District Court for the Western District of Washington on behalf of on behalf of the former minority shareholders of RealNetworks against RealNetworks and the former members of its Board of Directors (the “Board”),1 including Robert Glaser (“Glaser”), the Company’s Founder, Chairman, Chief Executive Officer and largest shareholder, for their violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. § 78n(e) and § 78t(a). Plaintiff’s claims arise in connection with the acquisition of the Company (the “Transaction”) by Glaser and Glaser’s investment entities Greater Heights LLC (“Parent”) and Greater Heights Acquisition LLC (“Merger Sub” and, together with Glaser and Parent, the “Glaser Parties”).
On March 1, 2024, Ventyx Biosciences, Inc. was sued for violations of the federal securities laws in the United States District Court for the Southern District of California on behalf of all persons and entities other than Defendants that purchased or otherwise acquired: (a) Ventyx common stock pursuant and/or traceable to the Offering Documents issued in connection with the Company’s initial public offering conducted on or about October 21, 2021 (the “IPO” or “Offering”); and/or (b) Ventyx securities between October 21, 2021 and November 6, 2023, both dates inclusive (the “Class Period”).
According to the Complaint, Snowflake Inc. is a data cloud platform that enables customers to consolidate data into a single source build data-driven applications and share data.The Complaint alleges that Defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) Snowflake had systematically oversold capacity to customers which created a misleading appearance of the demand for Snowflake’s products and services; (ii) Snowflake had provided significant discounts to its customers prior to its initial public offering (“IPO”) that temporarily boosted sales but would not be sustainable after the IPO and/or necessitate platform efficiency adjustments that negatively impacted client consumption and Snowflake’s revenue and profit margins; (iii) as a result, Snowflake’s customers were poised to roll over a material amount of unused credits (and thereby cannibalize future sales) at the end of their contracts’ terms or to refuse to renew their contracts at prior consumption levels or at all; and (iv) consequently, Snowflake’s product revenue and remaining performance obligations had been artificially inflated leading up to and during the Class Period.
On February 29, 2024, Snowflake Inc. was sued for violations of the federal securities laws in the United States District Court for the Northern District of California on behalf of investors who purchased Snowflake Class A common stock between September 16, 2020 and March 2, 2022, both dates inclusive (the “Class Period”).
On February 28, 2024, Nextdoor Holdings, Inc. f/k/a Khosla Ventures Acquisition Co. II was sued for violations of the federal securities laws in the United States District Court for the Northern District of California on behalf of all purchasers of the publicly traded Class A common stock of Nextdoor between July 6, 2021 and November 8, 2022, inclusive (the “Class Period”).
According to the Complaint, The Children’s Place, Inc. is a specialty portfolio of children’s brands. The Company designs, contracts to manufacture, and sells apparel, accessories and footwear, primarily under its proprietary brands: “The Children’s Place,” “Gymboree,” “Sugar & Jade,” and “PJ Place.” The Company’s retail and wholesale network includes four digital storefronts, more than five hundred stores in North America, wholesale marketplaces and distribution in sixteen countries through six international franchise partners.The Complaint alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, the Complaint alleges Defendants failed to disclose to investors: (1) that the Company was engaged in aggressive promotions; (2) that, as a result, the Company’s inventory values were overstated; (3) that the foregoing was reasonably likely to have an adverse impact on fiscal 2023 financial results; and (4) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
According to the Complaint, Nextdoor Holdings, Inc. began as Khosla Ventures Acquisition Co. II, a blank check company formed by the Sponsor Defendants. On July 6, 2021, KV Acquisition Co. and Nextdoor Private jointly announced they had entered into a merger agreement.Nextdoor operates a hyperlocal online social networking platform that connects neighbors, public agencies, and businesses via the internet. Nextdoor purports to facilitate this online community through various features and technological functions including a news feed where “neighbors” (i.e., users) can view posts, discussions, and pictures from other neighbors, as well as notifications, comments, and groups. At bottom, these features enable users to exchange information, services, and goods. The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (a) that Nextdoor’s financial results prior to the Merger had been temporarily inflated by the ephemeral effects of the COVID-19 pandemic, which had pulled forward demand for Nextdoor’s platform and cannibalized future advertising revenue growth; (b) that, rather than being sustained, such growth trends had already begun reversing at the start of the Class Period; (c) that Nextdoor’s total addressable market was materially smaller than the 312 million households represented to investors; (d) that, by the start of the Class Period, Nextdoor’s most important market, the U.S. market, was already substantially saturated, impairing the Company’s ability to monetize users and increase its ARPU or U.S. WAUs; (e) that, as a result of (a)-(d) above, Nextdoor’s revenue guidance for fiscal year 2022 had no reasonable basis in fact and the Company was tracking tens of millions of dollars below the revenue trajectory provided to investors.
On February 28, 2024, The Children's Place, Inc. was sued for violations of the federal securities laws in the United States District Court for the District of New Jersey on behalf of investors who purchased or otherwise acquired The Children’s Place securities between March 16, 2023 and February 8, 2024, inclusive (the “Class Period”).
According to the Complaint, Palo Alto Networks, Inc. is a global cybersecurity company that provides platforms and services to help secure enterprise users, networks, clouds, and endpoints. The Company focuses on four fundamental areas: network security, cloud security, security operations, and Unit 42 to provide threat intelligence and security consulting. Its subscription offerings include cloud-delivered security services, secure access service edge, cloud security, and security operations. The Complaint alleges that throughout the Class Period, Defendants made false and/or misleading statements, as well as failed to disclose material facts, including that: (1) the Company’s consolidation and platformization initiatives were not driving increased market share to a significant degree; (2) the Company would need to ramp up platformization and free product offerings to entice customers to adopt more of their platforms; (3) the Company’s high growth in billings was not sustainable; (4) new AI offerings were not facilitating greater platformization and consolidation; and (5) based on the foregoing, Defendants lacked a reasonable basis for their positive statements about customer demand, billings, and platformization, as well as related financial results, growth, and prospects.
