In re ON24, Inc. Securities Litigation

On February 3, 2022, Labaton Keller Sucharow LLP was appointed lead counsel in a securities class action against ON24, Inc. (ON24) relating ON24’s initial public offering (IPO) that raised more than $428 million in gross proceeds.  ON24 is a cloud-based digital experience platform that offers businesses the opportunity to convert customer engagement into revenue through interactive webinars, virtual events, and multimedia content experiences.  The action is pending before the Honorable Yvonne Gonzalez Rogers in the U.S. District Court for the Northern District of California.

On March 18, 2022, the lead plaintiff filed an amended complaint alleging that the IPO registration statement and prospectus made material misstatements and omissions in violation of Sections 11 and 15 of the Securities Act of 1933.  In particular, the amended complaint alleges that ON24 failed to disclose it had signed up new customers for one-year contracts during the second, third, and fourth quarters of 2020 that planned to either not renew or downsell—a larger-than-typical percentage of which were small- and medium-sized business (SMB) customers, nonideal customers focused on one-time events, and one-time use cases that planned to either not renew or downsell.  Given declining demand and the magnitude of new, one-year customers that ON24 signed up during the second, third, and fourth quarters of 2020 that were either not renewing or were going to downsell, ON24 already faced material customer churn and downselling at the time of the IPO, as well as inevitable weaker revenues, operating losses, and losses per share in 2021.

The case is In re ON24, Inc. Securities Litigation, No. 21-cv-8578 (N.D. Cal.) Labaton Keller Sucharow represents Lead Plaintiff Leadersel Innotech ESG.