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Eventbrite successfully defeats investor lawsuit
By Chris Cooke | Published on Thursday 30 April 2020
Given that, like all ticketing firms, Eventbrite is having to deal with the fall-out of the COVID-19 shutdown, bosses there will presumably be particularly pleased that they’ve managed to kick out of court a lingering lawsuit relating to the company’s IPO back in 2018.
Investors in Eventbrite went legal last year over allegations that the company had made false or misleading statements ahead of its IPO, in particular in relation to its earlier acquisition of rival Ticketfly and the integration of the two company’s platforms.
The litigation came after Eventbrite’s share price took a bashing in March and May 2019 in the wake of official updates on revenues and revenue projections – which were lower than expected – and the ongoing challenges around the integration of the Ticketfly and Eventbrite platforms.
That admission that the integration of Ticketfly was proving problematic contradicted what Eventbrite had said in the run up to the 2018 IPO, plaintiffs in the case argued. Which meant the company had deliberately misled potential investors about the business.
However, Eventbrite hit back last December, denying those claims and telling the courts that the investor lawsuit was baseless. “Plaintiffs claim that Eventbrite … misled investors about its September 2017 acquisition of Ticketfly”, the firm’s lawyers stated in a motion for dismissal, “but the complaint does not allege facts suggesting that Eventbrite made any false or misleading statements of material fact”.
Moreover, the lawyers argued, Eventbrite had been very upfront about the risks associated with the Ticketfly integration in documents put out before the IPO. Those documents “noted that this integration and migration process typically takes between twelve and 24 months and warned investors about many risks inherent in the integration and migration process”.
This week the judge overseeing the case concurred with Eventbrite’s arguments. “Plaintiffs’ vague allegations that the Ticketfly acquisition was ‘delayed’, ‘costly’, and that the integration missed ‘key features’ are insufficient to show that defendants ‘affirmatively’ created an impression of a state of affairs that differs in a material way from reality”, the judge wrote.
“In fact”, he added, “a closer inspection of Eventbrite’s SEC filings appears to belie plaintiffs’ claims that the company projected that the Ticketfly integration was going ‘smoothly'”.
With all that in mind the investor lawsuit has been dismissed. Though plaintiffs can submit an amended complaint if they so wish, with a 24 Jun deadline for doing so.
