SAN DIEGO, March 01, 2024 (GLOBE NEWSWIRE) — Robbins LLP informs investors that a shareholder filed a class action on behalf of all those who purchased or otherwise acquired Nextdoor Holdings, Inc. (NYSE: KIND) Class A common stock between July 6, 2021 and November 8, 2022. Self-proclaimed as the “neighborhood network,” Nextdoor operates a hyperlocal online social networking platform that connects neighbors, public agencies, and businesses via the internet.
For more information, submit a form, email attorney Aaron Dumas, Jr., or give us a call at (800) 350-6003.
The Allegations: Nextdoor Holdings, Inc. (KIND) Allegedly Made False and Misleading Statements
According to the complaint, on July 6, 2021, amid seemingly favorable market trends, Nextdoor Private announced that it would become a publicly traded company through a merger with the special purpose acquisition company KV Acquisition Co. The merger was completed on November 5, 2021.
Plaintiff alleges that during the class period, defendants failed to disclose that: (a) Nextdoor’s financial results prior to the merger had been temporarily inflated by the ephemeral effects of the COVID-19 pandemic, which had pulled forward demand for Nextdoor’s platform and cannibalized future advertising revenue growth; (b) rather than being sustained, such growth trends had already begun reversing at the start of the class period; (c) Nextdoor’s total addressable market was materially smaller than the 312 million households represented to investors; (d) by the start of the class period, Nextdoor’s most important market –the U.S. market – was already substantially saturated, impairing the Company’s ability to monetize users and increase its ARPU or U.S. WAUs; and (e) as a result of the above, Nextdoor’s revenue guidance for fiscal year 2022 had no reasonable basis in fact and the Company was tracking tens of millions of dollars below the revenue trajectory provided to investors.
Then, on March 1, 2022, Nextdoor reported its financial results for the fourth quarter and full year ending December 31, 2021 – the same quarter during which the merger was completed. Contrary to defendants’ prior claims that accelerating growth trends were being sustained, the Company reported that the revenue growth rate in the fourth quarter had declined sequentially by 18% to 48% year-over-year growth. In addition, Nextdoor reported quarterly ARPU of $1.65, revealing that the ARPU growth rate in the quarter had declined substantially by 26% to just 12% year-over-year growth from 38% growth in the third quarter, which indicated that the Company’s ability to monetize its platform was faltering. On this news, the price of Nextdoor common stock declined approximately 14%, from $6.24 on March 1, 2022 to $5.39 on March 4, 2022.
Nextdoor would ultimately go on to report three consecutive quarters of disappointing financial and operational results. As a result, the price of Nextdoor Class A common stock declined precipitously from the trading high immediately following the close of the merger of $18.59 per share to just $2.06 per share at the end of the class period, causing investors in Nextdoor to suffer millions of dollars in financial losses.
What Now: You may be eligible to participate in the class action against Nextdoor Holdings, Inc. Shareholders who want to serve as lead plaintiff for the class must file their papers with the court by April 29, 2024. A lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member. For more information, click here.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
About Robbins LLP: Some law firms issuing releases about this matter do not actually litigate securities class actions; Robbins LLP does. A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. Since our inception, we have obtained over $1 billion for shareholders.
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