NEW YORK–(BUSINESS WIRE)–Labaton Sucharow LLP (“Labaton Sucharow”) announces that the April 4, 2022he filed a securities class action lawsuit, captioned Sylebra Capital Partners Master Fund Ltd v Everbridge, Inc., No. 2:22-cv-2249 (ND Cal.) (the “Action”), on behalf of its clients Sylebra Capital Partners Master Fund Ltd, Sylebra Capital Parc Master Fund and Sylebra Capital Menlo Master Fund (together, the “Sylebra Funds”) against Everbridge, Inc. (“Everbridge” or the “Company”) and certain officers and directors of Everbridge (collectively, the “Defendants”). The action asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder, on behalf of all persons or entities who purchased or otherwise acquired shares of Everbridge common stock between November 4, 2019 and February 24, 2022, both dates inclusive (the “Class Period”), who suffered damages therefrom (the “Class” ).
Everbridge is a software company that provides enterprise software applications to automate and accelerate organizations’ operational response to “critical events” to keep people safe and organizations running smoothly. These critical events include public safety threats, information technology outages, cyberattacks, product recalls and supply chain disruptions. Shortly before and throughout the Class Period, Everbridge went on a buying spree, acquiring nine separate companies.
The Action alleges that, throughout the Class Period, the Defendants misled investors by: (1) failing to disclose that Everbridge was experiencing integration issues with respect to these acquisitions; (2) using the revenues from these acquisitions to mask increasingly stagnant organic growth; and (3) failing to disclose that the COVID pandemic had a material impact on the size of contracts that Everbridge was able to obtain, with a negative effect on the Company’s revenue growth.
The truth about Everbridge’s failed growth strategy was partially revealed in a press release issued on December 9, 2021. On that date, the company disclosed that defendant David Meredith had unexpectedly resigned as as CEO of Everbridge. The company also provided revenue growth forecasts for 2022 of between 20% and 23%, well below the planned baseline of 30%. On this news, Everbridge’s common stock price fell nearly in half, a price drop of $52.37 per share, or 45.4%, to close at $63.00 per share on December 10, 2021. .
Then, on February 24, 2022, the whole truth was revealed. On that date, Everbridge announced its fourth quarter and full year 2021 financial results, as well as its first quarter and full year 2022 guidance. growth of 20% in the first quarter of 2022 and a weak growth of 15-17% for the whole year, still lower than the disappointing forecasts previously published in December 2021.
Additionally, during the related earnings call on the same day, new acting co-CEO Vernon Irvin disclosed for the first time, despite previous statements to the contrary, that “those products and businesses” achieved through Everbridge’s buying spree “created complexity in the product line that generates integration challenges and complicated our go-to-market efforts.” He also said Everbridge would pause any new merger and acquisition activity to focus on product integration, as well as to “simplify” and significantly reduce its product offerings.
Defendant Patrick Brickley, the other co-CEO and acting CFO, said the focus on product integration and simplification alone would result in a loss of revenue of approximately $17 million. Brickley also disclosed that the decline in deal sizes “has been exacerbated by the lingering effects of COVID,” and would result in another $15 million reduction in revenue. On all of this news, Everbridge’s common stock price fell a further $15.68 per share, or 33.9%, to close at $30.61 per share on February 25, 2022.
As a result of the wrongful acts and omissions of the defendants and the precipitous decline in the market value of the company’s common stock, the plaintiff and other class members suffered significant losses and damages.
If you purchased Everbridge common stock during the Class Period and suffered damages as a result, you are a member of the “class” and may be able to seek an appointment as lead plaintiff. The lead plaintiff’s motion materials must be filed with the U.S. District Court for the Northern District of California on or before June 3, 2022. The lead plaintiff is a court-appointed representative for the absent class members. You do not need to seek an appointment as Lead Plaintiff to participate in a class action in the Action. If you are a group member and there is a recovery for the group, you can participate in that recovery as an absent group member. You may retain a lawyer of your choice to represent you in the Action.
If you would like to consider serving as the lead plaintiff or have questions about this lawsuit, please contact David J. Schwartz, Esq. of Labaton Sucharow, using the toll-free number (800) 321-0476, or by email at [email protected]
Sylebra funds are represented by Labaton Sucharow, which represents several of the largest pension funds in the United States and globally with combined assets under management of over $2 trillion. Labaton Sucharow has been recognized for his excellence by the courts and his peers, and he is consistently ranked in leading industry publications. Offices are located in New York, NY, Wilmington, DE and Washington, DC More information about Labaton Sucharow is available at www.labaton.com.
You can view a copy of the complaint here.