ON24, Inc. (ONTF) Misled Investors Regarding its Scalability
A class action was filed on behalf of all persons and entities that purchased ON24, Inc. (NYSE: ONTF) securities in connection with the Company’s February 2021 initial public offering (“IPO”), for violations of the Securities Act of 1933. 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.
According to the complaint, ON24 conducted its IPO on February 3, 2021, offering 8,560,930 shares for $50 per share, for proceeds of approximately $428,046,500. The Offering Documents touted the Company’s scalability, “highly engaged and loyal customer base,” and an increase in its “large enterprise customers” and revenue amid COVID-19. The Offering Documents, however, were materially inaccurate, misleading, and/or incomplete because they failed to disclose 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 its traditional customer profile and, as a result, were significantly less likely to renew their contracts.
On August 10, 2021, the Company announced its second quarter 2021 financial results, noting that it had “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.” Analysts responded quickly by downgrading the stock, which declined nearly 31%, falling from $32.31 per share on August 10, 2021, to close at $22.31 per share on August 11, 2021. The stock now trades as low as $18.49, a decline of more than 60% from the Offering Price.
If you purchased shares of ON24, Inc. (ONTF) securities pursuant to the Company’s February 2021 IPO, you have until January 1, 2022, to ask the court to appoint you lead plaintiff for the class.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.