b'of control by the institutional investor defendants wereThe state court further held that plaintiffs offered sufficient to state a claim at this stage of the proceedings:adequate facts at this stage regarding the misleading infused capital into Slack before its direct listing;nature of the prospectus concerning Slacks SLAs. owned respectively 23.8%, 13.2%, and 10.1% of SlacksIt agreed with plaintiffs that words like may or supervoting shares at the time of the direct listing; eachcould did not adequately convey that outages and had a director on the board, who reviewed and signedpenalties were known problems. The court deemed the Offering Materials; caused [Slack] to indemnifyit unnecessary to consider the remaining alleged them from any liabilities arising from the Securities Actmisrepresentations and omissions, given that it found and to obtain and maintain a directors and officersplaintiffs stated a Section 11 claim. insurance policy for them; caused Slack to effectuateFinally, the state court agreed that plaintiffs adequately the Offering because they wished to cash in their earlypled that certain individual defendants sold shares investment and stake in [Slack] as soon as possible;in the offering and/or solicited sales rendering them and sold their shares in the direct listing, respectivelystatutory sellers under Section 12(a), but held that earning $329 million, $116 million, and $39.6 million. Anplaintiffs had not alleged a Section 12(a) claim against interlocutory appeal to the Ninth Circuit on this order isSlack itselfwhich plaintiffs did not allege issued new set for oral argument on May 13, 2021 and the case hasshares in connection with the listingor Slacks chief been stayed pending the appeal.accounting officer and board member, who did not Meanwhile, on February 20, 2020, defendants soughtpersonally register stock for sale. Likewise, the court dismissal of the consolidated complaint in state courtheld that plaintiffs adequately alleged the individual on the usual grounds that plaintiff failed to plead falsity,defendants and institutional investor defendants were but also asserting unique grounds for dismissal specificsufficiently in positions of control to support their to the nature of a direct listing. In particular, defendantsSection 15 claim.contended that plaintiff failed to plead standing toSoon after this order issued, defendants again sought pursue his Sections 11 and 12(a) claims, defendants wereto stay the state court action in favor of the federal not statutory sellers under Section 12(a), and plaintiffaction contending that the court should wait until the could not establish Section 11 damages. Althoughappeal is heardwhich would be determinative on defendants sought to stay the state court case in favorthe state court actionbefore litigation proceeds. The of the federal action before the demurrer was fullystate court denied that motion, and defendants filed an briefed, the court denied the request. On August 12,answer on November 3, 2020. Discovery is ongoing. 2020, the state court largely denied defendants motion concluding that plaintiffs (1) adequately pled standing and misrepresentations regarding outages and penaltiesIn re Eventbrite, Inc. Securities Litigation, to support their Section 11 claims, (2) adequately pledCase No. 5:18-cv-02019, 2020 WL 2042078 Section 12(a) claims against defendants who sold stock,(N.D. Cal. Apr. 28, 2020) but not as to Slack or certain individual defendants who did not sell stock through the direct listing, and (3) pledAcquisition Difficulties And Platform Successcontrol to support their Section 15 claims.Eventbrite, Inc. hosts an event management platform The state court concluded that whether the particularthat allows event organizers to plan, market, and sell shares owned by the named plaintiff are traceable totickets to events across the world. Its core markets are the direct listing (and thus to the Offering Materials) isfestivals, music, registration events, and endurance a disputed factual issue not appropriate for decidingevents. In September 2017, Eventbrite acquired a at the pleadings stage; rather, plaintiffs are entitled tocompetitor, Ticketfly, LLC, from Pandora Media, Inc., for prove whether they purchased on the public offering$201.1 million. Eventbrite aimed to acquire Ticketflys or trace the sale back, even where, as here, there is acustomers for its own platform. Ticketfly differed mix of registered and unregistered securities on thefrom Eventbrites platform in that it focused solely on market. The state court also took the same approachindependent music venue online ticketing, which is a as the federal court when holding that damages weremore competitive space, and provided its customers not an element of a Section 11 claim and thus need notwith individualized experiences. After the acquisition, be pled, further noting that the lack of a pre-set publicEventbrite sought to migrate Ticketfly customers onto market price does not protect Defendants from beingits own platform. sued under Section 11 for issuance of a RegistrationIn September 2018, Eventbrite filed a registration Statement and Prospectus containing materialstatement and Prospectus in connection with its misrepresentations or material omissions.IPO through which it sold 11.5 million shares of Class 24'