b'scrutiny and suffering reputational damage. Later that day,their shares for sale on the same day as the direct Google issued a blog post conceding that it discoveredlisting. In connection with its direct listing, Slack filed and remediated the bug in March 2018. Subsequently,a registration statement and a prospectus (collectively Googles stock price declined by nearly 6%. Thereafter,the Offering Materials) with the SEC.Google announced plans to shut down Google+. Investors filed a putative class action lawsuit against Investors filed putative securities class actions againstSlack, its officers, directors, and certain institutional Alphabet and its officers, alleging that betweenshareholders in the U.S. District Court for the Northern the discovery of the breach and its announcement,District Court of California alleging violations of defendants made materially false and misleadingSections 11, 12(a) and 15 of the Securities Act on the statements regarding the extent of the breach andgrounds that statements in the Registration Statement users data security in violation of Sections 10(b) andwere false and misleading. Defendants moved to 20(a) of the 1934 Act and Rule 10b-5 promulgateddismiss that complaint and, on April 21, 2020, the court thereunder. Defendants filed a motion to dismiss thegranted defendants motion in part and denied it in part, consolidated amended complaint, which the courtrejecting defendants primary argument that plaintiff granted, with leave to amend, holding that plaintiffslacked Section 11 standing. failed to plead a misrepresentation, omission of materialOn June 5, 2020, the court, upon motion by fact, or scienter. Following the courts order, plaintiffsdefendants, issued an order certifying its April 21, 2020 did not file an amended complaint, and judgment wasorder on defendants motion to dismiss for interlocutory entered in the case on March 13, 2020. On April 9,appeal to consider the propriety of its holdings with 2020, plaintiffs appealed to the U.S. Court of Appealsrespect to standing. The U.S. Court of Appeals for the for the Ninth Circuit. Briefing has been completed andNinth Circuit granted defendants petition for permission oral argument is expected in spring of 2021.to appeal on July 23, 2020. Briefing is complete and oral argument is set for May 13, 2021. Pirani v. Slack Technologies, Inc. et al., Case No. 20-16419 (9th Cir.)Azar v. Yelp, Inc., Case No. 18-cv-00400-Slowed Growth / Service Disruptions AfterEMC (N.D. Cal.) Direct Listing Missed Guidance And Revised Projections As discussed above, Slack offers workplaceYelp, Inc. (Yelp) provides an online platform collaboration software that brings together people,for business reviews. Yelp derives revenue from applications and data, often replacing or significantlybusinesses advertising on its platform. In 2016, Yelp supplanting the use of email within an organization.prioritized increasing and retaining local business In lieu of an IPO, the company pursued a direct listingadvertising, using promotional offers to increase the of its Class A stock on the New York Stock Exchange.number of local businesses advertising on Yelp. The Slack was listed for sale on the NYSE as of June 20,company also used cancellation fees to discourage 2019. The direct listing followed a 2018 SEC ruleearly contract terminations by those same business. change that allowed companies to enter the publicA significant portion of the businesses that signed market for the first time without a public offeringup in 2016 experienced low engagement with their of its securities, but still subjected the company toadvertising and, thus, cancelled their contracts by late registration requirements under the 1933 Act. Shares2016 and early 2017. Despite these cancellations, in held by early investors were not subject to the sameearly 2017, Yelp and its executives trumpeted the local lock-up period as with an IPO, and could instead offerbusiness advertising programs strong retention rate 55'