Lawyers representing aggrieved Eventbrite investors have negotiated a $1.9m settlement with the event management and ticketing firm over claims of misleading statements.
Plaintiffs told a California judge they had come to an agreement with Eventbrite, explaining that due to the current challenges facing the wider live entertainment sector due to COVID-19, they would prefer to accept it than continue a legal battle against the ticketing firm, according to Law360.
Last year, investors that purchased shares in the San Francisco-headquartered ticketing company between its September 2018 IPO and Eventbrite’s 2019 financial statements banded together for a class action suit, claiming Eventbrite’s integration with Ticketfly was proving to be more challenging than the firm had suggested.
In addition, shares in the ticketing company fell in both March and May of 2019 after revenue projections were much lower than expected.
The $1.9m falls short of what the plaintiffs had hoped to secure from the litigation, but they admitted that their chances at getting something more appealing looked slim based on several factors, but added it “will nonetheless prove meaningful for settlement class members”.
They told the judge: “Dimming the prospects of any recovery, during litigation, the world was struck by the worst pandemic it suffered since 1918 – particularly bad news for a company whose business is helping customers plan live events.
“With claims against Eventbrite dismissed in state and federal court, and the company’s future uncertain, the prospect that settlement class members would recover anything looked dim. Yet, lead counsel nonetheless were able to negotiate the $1.9m settlement.”
In May, Eventbrite denied that there was any valid claim against it and filed a counter complaint stating that the suit “does not allege facts suggesting that Eventbrite made any false or misleading statement of material fact.”
The ticketing firm was granted its bid to dismiss the lawsuit in its entirety, while offering investors the option to amend their complaint to make it more specific.
Eventbrite shares are down 57% this year due to the spread of the coronavirus pandemic and in its recently released its earnings report for Q2 of 2020, it reported net revenue for the period dropping more than 90%. It also revealed that the company’s net revenue was just $8.4m for the quarter, down from $80.8m in Q2 2019.