Eventbrite has been named in three class-action lawsuits by investors after the ticketing firm’s share prices plummeted by 30 per cent.
The Schall Law Firm of California, Vincent Wong, Esq. of New York, and Bronstein, Gewirtz & Grossman, LLC, also of New York, filed the suits.
Each of the complainants alleged that Eventbrite’s leadership made misleading declarations regarding its IPO in September, causing shareholders to suffer damages.
The lawsuits came after a drop in stock prices for Eventbrite last week after its first quarterly report “showed widening losses, lower than expected second-quarter guidance and growth issues tied to their continued focus on integrating Ticketfly after purchasing the company in 2017,” according to Billboard.
Eventbrite missed its guidance on earnings per share, losing $0.13 per share instead of the $0.08 expected by analysts. Operating expenses grew 23.1 per cent year-over-year, with product development and administrative costs surging.
The firm’s stock price declined around 30 per cent after earnings dropped amid doubts that the company’s focus on retaining current customers will come at the cost of new business.
According to Billboard, Eventbrite’s slow integration of Ticketfly, which it acquired for $200m from Pandora in 2017, has played a big role in its growing losses.
Schall’s complaint said Eventbrite “made false and misleading statements to the market. Eventbrite’s migration of customers from Ticketfly, which it acquired in September 2017, occurred at a slower pace than anticipated, which resulted in a longer timeline to reach completion.
“This negatively impacted the Company’s revenue growth. Based on these facts, the Company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about Eventbrite, investors suffered damages.”