Slack Technologies, Inc.

In June 2019, Slack went public through the Offering of its Class A common stock with a reference price of $26.00.

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. The Company also stated that revenue “was negatively impacted by $8.2 million of credits related to service level disruption in the quarter.”

On this news, the Company’s share price fell $3.69, or nearly 12%, over two consecutive trading sessions to close at $27.38 per share on September 6, 2019, thereby injuring investors.

By the commencement of this action, the Company’s stock was trading as low as $25.72 per share, a significant decline from the $26 per share reference price for the Offering.

The complaint filed in this class action alleges that the Registration Statement was false and misleading and omitted to state material adverse facts. Specifically, Defendants failed to disclose to investors: (1) that the Company’s Slack Platform was susceptible to recurring service-level disruptions; (2) that such disruptions were increasingly likely to occur as the Company scaled its services to a larger user base; (3) that the Company provides credits even if a customer was not specifically affected by service-level disruptions; (4) that, as a result, any service-level disruptions would have a material adverse impact on the Company’s financial results; and (5) 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.