Freshworks provides customer engagement software for businesses. On or about September 22, 2021, Freshworks conducted its IPO, offering 28.5 million shares of its common stock to the investing public at a price of $36 per share (the “Offering Price”).
The Complaint alleges that the Offering Documents were negligently prepared and, as a result, contained untrue statements of material facts or omitted to state other facts necessary to make the statements made not misleading, and were not prepared in accordance with the rules and regulations governing their preparation. The Offering Documents omitted to state that, at the time of the Offering, Freshworks’ net dollar retention rate had plateaued while its revenue growth rate and billings were, in fact, decelerating.
As the truth about the Company’s business reached the market, the value of its shares declined dramatically, causing Freshworks investors to suffer significant damages. Indeed, by the commencement of the action, Freshworks’ shares traded as low as $10.51 per share, representing a decline of over 70% from the Offering Price.