SPROUT SOCIAL, INC. (NASDAQ: SPT): Sprout Social Has Been Sued For Violations of the Federal Securities Laws in connection with false and misleading statements made to investors and the subsequent 40% price decline in the stock.
 
If you incurred losses in Sprout Social, you are encouraged to fill out the form below to get more information and speak with an attorney about your rights.
 
Why is SPT being Sued?

The Complaint alleges that Sprout Social and certain of its senior officers made materially false and misleading statements to investors related to the purported: (a) “smooth” integration of Tagger Media, Inc.; (b) “acceleration” of Sprout’s enterprise segment; and how Sprout had (c) “transformed our business model to position us to deliver increasingly durable and increasingly efficient growth.”

In reality, the Complaint alleges that: (a) Sprout “faced integration challenges with its acquisition of Tagger” and that the integration was not “smooth”; (b) a substantial portion of the “acceleration” in the company’s enterprise segment was due to “seasonality”; and (c) because of this seasonality, as well as “self-induc[ed] sales execution headwinds,” Sprout’s business model was neither “durable” nor “efficient.” 

The Stock Declines Over 40%

When the alleged truth of Defendants’ statements were revealed on May 2, 2024, Sprout’s stock price cratered over 40% in a single day.  The company also announced it will no longer report annual recurring revenue—a key financial metric that investors use to gauge the health of Sprout’s business. 

Wall Street analysts were surprised by the news.  One analyst wrote that it was “taking this one particularly hard because in a number of our recent launch conversations, we have mentioned SPT as a favorite small-cap growth name to own, but the facts have changed too much..  Another wrote that “the execution issues [Sprout] is now facing . . . should have been apparent much earlier than today” and that “[f]rom a valuation perspective, becoming less-transparent and more-aggressive with accounting treatments is never beneficial to how investors view valuation.”

The lawsuit seeks to recover compensatory monetary damages for investors sustained because of Sprout Social’s alleged wrongdoing.

I Suffered Losses, What Should I Do?

If you suffered losses from your investment in Sprout Social, Inc. you should fill out the form below to speak with an attorney about your rights.  

All representation is on a contingency fee basis.  Shareholders are not responsible for any court costs or expenses of litigation.  The Firm will seek court approval for any potential fees and expenses.
 
You can also contact:
Ross Shikowitz
ross@bfalaw.com
212-789-3619

Why Bleichmar Fonti & Auld LLP?

Bleichmar Fonti & Auld LLP is a leading international law firm representing plaintiffs in securities class actions and shareholder derivative litigation.  It was named among the Top 5 plaintiff law firms by ISS SCAS in 2023 and its attorneys have been named Titans of the Plaintiffs’ Bar by Law360 and SuperLawyers by Thompson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.’s Board of Directors (pending court approval), as well as $420 million from Teva Pharmaceutical Ind. Ltd. 

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