RM LAW, P.C. announces that a class action lawsuit has been filed on behalf of all persons or entities that purchased or otherwise acquired Slack Technologies, Inc. (“Slack” or the “Company”) (NYSE: WORK) Class A common stock pursuant and/or traceable to Slack’s registration statement and prospectus (collectively, the “Registration Statement”) on or around June 20, 2019.
Slack shareholders may, no later than November 18, 2019, move the Court for appointment as a lead plaintiff of the Class. If you purchased shares of Slack and would like to learn more about these claims or if you wish to discuss these matters and have any questions concerning this announcement or your rights, contact Richard A. Maniskas, Esquire toll-free at (844) 291-9299 or to sign up online, click here.
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 filed its prospectus on a Form 424B4 with the SEC, which forms part of the Registration Statement. Slack registered for the resale of up to 118,429,640 shares of Class A common stock by registered shareholders at a reference price of $26.00. According to the Registration Statement, the resale of Slack’s stock was not underwritten by any investment bank and the registered stockholders would purportedly elect whether or not to sell their shares.
On September 4, 2019, Slack reported its second-quarter fiscal 2019 results and issued guidance for the third quarter, expecting a wider loss than analysts predicted. In a press release, Slack stated, in part, “Revenue was negatively impacted by $8.2 million of credits related to service level disruption in the quarter.” On a conference call to discuss the results, Stewart Butterfield, Slack’s Chief Executive Officer, stated that the disruptions were attributable, at least distantly, to issues with scaling Slack’s services to encompass a greater user-load.
Following this news, Slack’s share price fell $3.69 per share, nearly 12%, over two consecutive trading sessions to close at $27.38 per share on September 6, 2019.
The complaint alleges that the Registration Statement was false and misleading and omitted to state material adverse facts. Specifically, the defendants failed to disclose to investors that: (1) Slack’s platform was susceptible to recurring service-level disruptions; (2) such disruptions were increasingly likely to occur as Slack scaled its services to a larger user base; (3) Slack provides credits even if a customer was not specifically affected by service-level disruptions; (4) as a result, any service-level disruptions would have a material adverse impact on Slack’s financial results; and (5) as a result of the foregoing, the defendants’ positive statements about Slack’s business, operations, and prospects, were materially misleading and/or lacked a reasonable basis.
If you are a member of the class, you may, no later than November 18, 2019, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain RM LAW, P.C. or other counsel of your choice, to serve as your counsel in this action.