Eventbrite faces lawsuit in fallout from shares drop

Eventbrite shareholders are taking a class action lawsuit against the ticketing and events company, alleging they were misled at the time of the company’s initial public offering (IPO) in September 2018.

International securities and consumer rights litigation firm Scott+Scott Attorneys at Law LLP filed the lawsuit on behalf of claimants who purchased Eventbrite stock in the company’s IPO at US$23 a share.

The lawsuit alleges that Eventbrite misled potential buyers in its IPO registration statement, declaring that the acquisition of ticketing platform Ticketfly “had a positive impact” on net revenue growth” in the third quarter of 2017.

The claimants also state that the company failed to disclose that, at the time of IPO, the Ticketfly migration was progressing more slowly than stated, therefore delaying integration and negatively impacting growth.

Eventbrite shares have dropped more than 50%, from over $32 to almost $16, in the past three months.

The lawsuit alleges that Eventbrite misled potential buyers in its IPO registration statement

Shares first declined on 7 March 2019, upon the release of Eventbrite’s annual financial results and the admission that the Ticketfly integration “will impact revenues in the short-term”. Shares then dropped further, to $17, in May following a weaker-than-expected financial start to 2019.

At the end of May, Eventbrite Music president and Ticketfly co-founder Andrew Dreskin stepped down from his role to transition to an advisory position.

The company’s shares remain down at $15.74, at the time of publishing (6 June).

Eventbrite declined to comment.

The lawsuit is not the first that Eventbrite has faced in relation to Ticketfly. Claimants attempted to sue the company following a Ticketfly hack in May 2018, alleging that “lax cybersecurity procedures” allowed hackers to gain access to 27 million customers’ personal data.

An Illinois judge dismissed the case earlier this week. The claimants have until 9 June to file an amended complaint.

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