Case Summary

Fastly

NYSE: FSLY

Case Details

  • Kula v. Fastly, Inc. et al.
  • Class Period:February 15, 2024 - May 1, 2024
  • Date Filed:May 24, 2024
  • Jurisdiction:U.S. District Court, Northern District of California
  • Docket Number: 3:24-cv-03170
  • Lead Plaintiff Deadline: July 23, 2024
Days Left to
Seek Plaintiff
28

Overview

A class action lawsuit has been filed against Fastly, Inc. (“Fastly” or the “Company”) (NYSE: FSLY) and certain of the Company’s current and former senior executive officers alleging violations of the federal securities laws.  The Fastly lawsuit is brought on behalf of all persons and entities who purchased or otherwise acquired Fastly securities between February 15, 2024, and May 1, 2024, both dates inclusive (the “Class Period”).  Investors have until July 23, 2024, to seek appointment as lead plaintiff of the Fastly class action lawsuit.

Fastly operates an edge cloud platform for processing, serving, and securing customer’s applications.  The edge cloud is a category of Infrastructure-as-a-Service that purportedly enables developers to build, secure, and deliver digital experiences.  Fastly’s platform includes a Content Delivery Network (“CDN”), or a geographically distributed network of proxy servers and their data centers.  Content owners such as media companies and e-commerce vendors pay CDN operators to deliver their content to their end users.  Certain companies have adopted a “multi-CDN” framework which combines multiple CDNs from various providers into one large global network.  In 2023, a “consolidation trend” emerged in the CDN industry, in which several prominent multi-CDN companies reduced the number of CDN vendors they had previously managed in an effort to simplify their operations and increase efficiency, opting instead to manage fewer CDN vendors.  Facing reduced competition, Fastly was able to materially increase its market share and drive favorable sequential growth.

The Fastly class action lawsuit alleges that on May 1, 2024, Fastly announced its first quarter 2024 financial results.  The Company reported revenue of only $133.52 million, missing consensus estimates by $0.35 million.  The Company also lowered its fiscal year (“FY”) 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.  On this news Fastly’s stock price fell $4.14 per share, or 32.02%, to close at $8.79 per share on May 2, 2024.

As alleged in the Fastly class action lawsuit, Defendants made false and/or misleading statements and/or failed to disclose that: (1) 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; (2) the foregoing issues were likely to have a material negative impact on the Company’s revenue growth; (3) accordingly, the Company was unlikely to meet its own previously issued revenue guidance for FY 2024; (4) as a result, the Company’s financial position and/or prospects were overstated; and (5) as a result, the Company’s public statements were materially false and misleading at all relevant times.

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If you purchased or otherwise acquired Fastly securities between February 15, 2024, and May 1, 2024, both dates inclusive, and you wish to serve as lead plaintiff in this lawsuit, we encourage you to submit your information to DiCello Levitt LLP via the form on this page. 

You can also contact DiCello Levitt partner Brian O’Mara by calling (888) 287-9005 or at investors@dicellolevitt.com. 

The deadline to apply to the Court to serve as a lead plaintiff in the Fastly lawsuit is July 23, 2024.

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