Eventbrite Settles Stockholder Lawsuit for $1.9 Million Eventbrite Settles Stockholder Lawsuit for $1.9 Million
Investors who sued Eventbrite claiming the company misled them in its initial public offering have negotiated a $1.9 million settlement, accepting a lower payout... Eventbrite Settles Stockholder Lawsuit for $1.9 Million

Investors who sued Eventbrite claiming the company misled them in its initial public offering have negotiated a $1.9 million settlement, accepting a lower payout than hoped due to the crunch on the company and industry from the coronavirus pandemic.

The lawsuits were filed after a pair of sharp drops in Eventbrite (NYSE: EB) stock price as poor earnings reports and reports of struggles in the integration of TicketFly send prices tumbling to a fraction of the initial post-IPO range. The stock has continued to struggle, falling to as low as $5.86 amid the halt on live events in many areas due to government restrictions.

“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,” lawyers representing the investors told the judge.

“With claims against Eventbrite dismissed in state and federal court”, they went on, “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 $1.9 million settlement”.

And while a lower sum than originally hoped, that cash “will nonetheless prove meaningful for settlement class members”.

After its IPO in 2018, Eventbrite (NYSE: EB) stock suffered two steep drops to its share price that triggered the lawsuits. Poor Q4 2018 earnings reports caused a 30 percent fall in March of last year, followed by another dim earnings report for Q1 2019 that moved the number further down.

That triggered the lawsuits, which alleged that Eventbrite’s leadership “made false and misleading statements to the market. Eventbrite’s migration of customers from Ticketfly, which it acquired in September 2017, occurred at a slower pace than anticipated, which resulted in a longer timeline to reach completion. This negatively impacted the Company’s revenue growth. Based on these facts, the Company’s public statements were false and materially misleading throughout the class period. When the market learned the truth about Eventbrite, investors suffered damages.”

Eventbrite stock has shown signs of improving of late after earnings weren’t as bad as analysts expected, but is still trading at below $10 save for brief blips in May and early June. It is at $9.91 as of Friday morning.