NEW YORK – The value of shares in the cloud-based platform ON24 fell sharply after the company’s initial public offering, dropping nearly 63% from the IPO offering price, according to a class-action lawsuit against the company.
The lawsuit was filed recently in U.S. District Court for the Northern District of California, on behalf of everyone who acquired ON24 securities pursuant and/or traceable to the company’s initial public offering.
ON24 claimed that demand for its platform and products increased after the COVID-19 pandemic began, the law firm Bragar Eagel and Squire said in a Dec. 30 release. The company conducted its IPO on Feb. 3, 2021, offering 8.56 million shares of common stock to the public for $50 per share, for anticipated proceeds of about $428.04 million.
Representations made in the company’s registration statement and prospectus were inaccurate because they did not disclose that the surge in COVID customers leading up to the IPO consisted of a significant number that did not fit ON24’s traditional customer profile, the law firm said. As a result, those customers were significantly less likely to renew their contracts.
“After the IPO, as the true facts emerged, the value of the company’s assets declined sharply,” the law firm said in the news release. “By the commencement of the action, ON24’s shares traded as low as $18.70 per share, a decline of nearly 63% from the IPO offering price.”