SHAREHOLDER ALERT: Pomerantz Law Firm Reminds Shareholders with Losses on their Investment in ON24, Inc., of Class Action Lawsuit and Upcoming Deadline - ONTF
NEW YORK, Dec. 29, 2021 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against ON24, Inc. ("ON24" or the "Company") (NYSE: ONTF) and certain of its officers. The class action, filed in the United States District Court for the Northern District of California, and docketed under 21-cv-08744, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired ON24 securities: under Sections 11 and 15 of the Securities Act of 1933 ("Securities Act") against (i) ON24, Inc. ("ON24" or the "Company") and (ii) certain of the Company's senior executives and directors who signed the Registration Statement, effective February 2, 2021, issued in connection with the Company's initial public offering (the "IPO" or the "Offering"). Plaintiffs allege that the Registration Statement and Prospectus (collectively, the "Offering Documents"), filed with the Securities and Exchange Commission on January 8, 2021 and February 4, 2021, respectively, including all amendments thereto, contained materially incorrect or misleading statements and/or omitted material information that was required by law to be disclosed. Defendants are each strictly liable for such misstatements and omissions therefrom (subject only to their ability to establish a "due diligence" affirmative defense) and as so liable in their capacities as signers of the Registration Statement and/or as an issuer, statutory seller, and/or offeror of the shares sold pursuant to the Offering.
If you are a shareholder who purchased ON24 common stock pursuant and/or traceable to the Offering Documents issued in connection with the Company's IPO and ON24 securities during the Class Period, you have until January 3, 2022 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at [email protected] or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
ON24 purports to be a leading, cloud-based digital experience platform that enables businesses to convert customer engagement into revenue through interactive webinar experiences, virtual event experiences, and multimedia content experiences.
The complaint alleges that, the Offering Documents' representations were materially inaccurate, misleading, and/or incomplete because they failed to disclose, inter alia, that the surge in COVID-19 customers ON24 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.
On August 10, 2021, after the markets closed and in connection with announcing the Company's second quarter 2021 financial results, ON24 offered guidance for the remainder of the year. Specifically, ON24 guided to revenue of no more than $48.5 million in Q3 and $204.5 million for fiscal year 2021, missing analyst consensus by $2.7 million and $4.5 million, respectively.
During the Company's analyst call held that same day, Defendant Sharat Sharan, President and Chief Executive Officer of ON24, admitted that ON24 "experienced higher-than-expected churn and down-sell from customers [it] signed up in the second quarter of last year during the peak of COVID." (Emphasis added.) He then added, "this higher churn was primarily in the first-time renewal cohort, customers who signed [] [one]-year contracts last year and who were up for renewal."
Analysts at Piper Sandler & Co. ("Piper Sandler"), which rated ON24 as "overweight" in its August 11, 2021 report, likewise noted how the Company's second quarter results were "clearly more negative than [it] had anticipated," expressing concern over the fact that ON24's ARR had "stalled," due to "renewal downsizing and churn."
Piper Sandler also noted how the "combination of renewal downsizing and higher SMB churn was accentuated by a material reduction in the 2H outlook for professional services."
Analysts at Canaccord Genuity LLC ("Canaccord Genuity") also downgraded ON24 to hold on August 11, 2021 as a result of "the COVID tourist depart[ures]" ON24 observed during the quarter. (Emphasis added.) In its report, which was titled, "COVID renewals take a bite out of growth; ONTF in the penalty box, downgrade to HOLD,"
On this news, ON24's stock declined nearly 31%, falling from $32.31 per share on August 10, 2021 to close at $22.31 per share on August 11, 2021.
By the commencement of this action, ON24's stock traded as low as $18.66
per share, a nearly 63% decline from the $50 per share IPO price.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
CONTACT:
Robert S. Willoughby
Pomerantz LLP
[email protected]
888-476-6529 ext. 7980
SOURCE Pomerantz LLP
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