ON24, Inc. (“ON24”) is a developer of cloud-based customer service platforms.
In February 2021, ON24 conducted its initial public offering (“IPO”), selling 8,560,930 shares of its common stock at a price of $50 per share.
Then, on August 10, 2021, after the markets closed, ON24 announced its second quarter 2021 financial results and provided guidance for the remainder of the year. Specifically, ON24 expected revenue of no more than $48.5 million in the third quarter and $204.5 million for fiscal year 2021, missing analyst consensus estimates by $2.7 million and $4.5 million, respectively.
On this news, ON24’s stock declined $10.00, or nearly 31%, to close at $22.31 per share on August 11, 2021. Since the IPO, ON24’s stock has traded as low as $18.66 per share, 63% below the IPO price of $50 per share.
A securities class action has been filed against ON24 on behalf of shareholders that purchased ON24 shares between February 1, 2021 and August 10, 2021. This case has been filed in the U.S. District Court for the Northern District of California.
The complaint filed in this class action alleges that the Registration Statement was materially misleading because it failed to disclose, among other things, that the surge in COVID-19 customers observed in the lead up to the IPO consisted of a significant number that did not fit ON24’s traditional customer profile, and, as a result, were significantly less likely to renew their contracts.
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