Shareholders seeking damages following the decline in Eventbrite stock allege that the company misled buyers about the impact of the Ticketfly integration
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A California judge has granted Eventbrite's bid to dismiss in its entirety a suit that alleged the company misled investors in the run-up to its 2018 stock market launch
By IQ on 30 Apr 2020
Eventbrite has beaten a class-action lawsuit that accused it of misleading investors at the time of its September 2018 flotation.
As previously reported, the suit – filed on behalf of claimants who purchased Eventbrite stock in the company’s initial public offering (IPO) at US$23 a share – alleges the ticketing company deceived potential buyers in its IPO registration statement by declaring that the acquisition of Ticketfly “had a positive impact on net revenue growth” in the third quarter of 2017, when in fact the migration was progressing more slowly than stated, delaying integration and negatively affecting growth.
San Francisco-based Eventbrite denied the allegations, its lawyers calling the case without merit and saying the complaint contains no “facts suggesting that Eventbrite made any false or misleading statements of material fact”.
On Tuesday (28 April), California judge Edward Davila ruled in favour of Eventbrite, according to Law360, granting the company’s bid to dismiss the suit in its entirety, while giving the investors a chance to amend their complaint by 24 June to make it more specific.
Judge Edward Davila ruled in favour of Eventbrite, granting the company’s bid to dismiss the suit in its entirety
“Plaintiffs’ vague allegations that the Ticketfly acquisition was ‘delayed’, ‘costly’ and that the integration missed ‘key features’ are insufficient to show that defendants ‘affirmatively’ created an impression of a state of affairs that differs in a material way from reality”, said Davila, adding: “In fact, a closer inspection of Eventbrite’s SEC filings appears to belie plaintiffs’ claims that the company projected that the Ticketfly integration was going ‘smoothly’”.
The suit was filed following a plunge in Eventbrite’s share price, from a high of over $32 to less than $16 in June 2019.
In common with other live entertainment companies, Eventbrite shares have plummeted further as a result of the ongoing Covid-19 pandemic, with stocks trading at just shy of $10 at press time, up from a low of $5.86 on 3 April.
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