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TEAM.US
id: 575
Atlassian (TEAM) Misleading Statements Case
N.D. California
Court23-CV-04355
Case number05 Aug 2022
Class period Start03 Nov 2022
Class period End05 Feb 2023
Lead Plaintiff motion deadline- Atlassian (TEAM) dramatically lowered its financial projections for 2023, which came as a shock to both the market and analysts.
- On this news, Atlassian (TEAM) stock dropped 29% wiping out $7.5 B of market cap, seriously damaging Investors.
- Investors suspect Atlassian (TEAM) & its Leaders misguided them which negatively affected the value of their shareholdings.
On November 3, 2022, Atlassian (TEAM) filed a Current Report with the SEC that included a shareholder letter for Q1 2023, which ended September 30, 2022. The Q1’23 Shareholder Letter, which was signed by Cannon-Brookes and Farquhar, reminded investors of “our ‘Open company, no bullshit’ value” and started “with the topic that’s top of mind for shareholders: macro impacts.”
The Q1’23 Shareholder Letter revealed:
- that the “rate of Free instances converting to paid plans . . . trend became more pronounced in Q1” and
- that “this quarter, we started to see a slowing in the rate of our paid user growth from existing customers.”
Notably, whereas 3 months prior, the Company guided 50% year-over-year growth for Cloud revenue, the Q1’23 Shareholder Letter further revealed a significant reduction to the Company’s prior guidance, explaining the Company was “lowering our Cloud revenue growth outlook to a range of approximately 40% to 45% year-over-year for FY23.”
Analysts expressed “surprise” at the disappointing results.
- Citibank issued a report on November 3, 2022, decrying the “negative revisions and significant and unexpected pivot in demand tone.”
- Wolfe Research reported the same day that Atlassian “delivered unusually disappointing F1Q23 and lowered its expectations for the full year which took us and investors by surprise.” The Wolfe Research analyst opined that the “abrupt change in tone and outlook likely puts shares in the penalty box until more clarity on subscription revenue growth durability can be gained.”
Taking all the representations and market reactions into account, Investors have reason to suspect that the Company and its Leaders could violate the rights of shareholders, which could result in significant investment losses for them.
Case Status
Lead Plaintiff Appointed
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Failure to Disclose,
Price manipulation,
Omissions
Suspected Party
Directors,
Management,
Service Provider,
Research Entity
Security Type
Stocks
Trade Direction
Long
Shock Event Date
03 November 2022
Filing date
03 February 2023
Lead Plaintiff Deadline
05 February 2023
Judge
Hon. William H. Orrick