NEW YORK, June 13, 2024 (GLOBE NEWSWIRE) -- The law firm of Kirby McInerney LLP reminds investors that a class action lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of those who acquired Fastly, Inc. (“Fastly” or the “Company”) (NYSE: FSLY) securities during the period of February 15, 2024 to May 1, 2024, inclusive (“the Class Period”). Investors have until July 23, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
[Click here to learn more about the class action]
On May 1, 2024, Fastly announced its first quarter 2024 results. Despite the Company’s positive statements just weeks about its performance and near-term business prospects, Fastly reported revenue of only $133.52 million, missing consensus estimates by $0.35 million. The Company also lowered its fiscal year 2024 revenue guidance to a range of $555 million to $565 million, significantly below its previously issued FY 2024 revenue guidance of $580 million to $590 million, and likewise below consensus estimates of $584.62 million for the same period.
That same day, Fastly held a conference call to discuss the Company’s Q1 2024 results. Fastly CEO Todd Nightingale attributed the Company’s disappointing results to “a reduction of revenue from a small number of [Fastly’s] largest customers.” Nightingale further reported that the Company saw “significant volatility” in the Content Delivery Network (CDN) strategy run by many of Fastly’s top 10 accounts. Further, Fastly’s CFO Ronald Kisling stated that the Company is “facing a challenging environment of revenue declines in our largest customers, overshadowing the impact of new customer acquisition and product pipeline[,]” and that the Company would not benefit in 2024 from the favorable impact of the early 2023 CDN consolidation that drove favorable sequential growth in the prior year same period.
Then, on May 2, 2024, Bank of America downgraded Fastly stock from a “Buy” rating to an “Underperform” rating and cut its price target on the stock from $18 per share to a mere $8 per share, noting that “[d]ecelerating growth in Fastly’s largest customers, share loss in delivery, and limited visibility in 2H cause us to question a rebound in 2024.” On this news, the price of Fastly shares declined by $4.14 per share, or approximately 32.02%, from $12.93 per share on May 1, 2024 to close at $8.79 on May 2, 2024.
The lawsuit alleges that throughout the Class Period, Fastly made false and/or misleading statements and/or failed to disclose that: (i) contrary to its representations to investors, Fastly was in fact experiencing a significant deceleration in growth among its largest customers and was losing the increased market share it had gained as a result of the 2023 CDN consolidation trend; and (ii) accordingly, the Company was unlikely to meet its own previously issued revenue guidance for FY 2024.
If you purchased or otherwise acquired Fastly securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
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Contacts
Kirby McInerney LLP
Thomas W. Elrod, Esq.
212-699-1180
https://www.kmllp.com
investigations@kmllp.com
