b'The 7-nanometer CPU technology purportedly offerspossible[.] Fastlys largest customer is ByteDance, a double the efficiency and 20% higher performance perChinese company that operates TikTok. Since at least watt than its 10-nanometer products. In May 2019, Intellate 2019, the U.S. government has subjected TikTok projected that it would begin shipping its 7-nanometerto heavy scrutiny due to alleged fears that the Chinese products in 2021. In April 2020, Intel released its firstgovernment could access the data TikTok collects from quarter 2020 financial results revealing that revenueits users. Specifically, in October 2019, U.S. lawmakers was up, and its Form 10-Q affirmed its strong financialwarned that TikTok could pose a national security risk results while disclosing that its success depended on aand called on regulators and intelligence agencies to variety of factors including time-to-market and reliableinvestigate TikToks ties to China. product roadmap execution. Company risk factors, IntelOn August 5, 2020, after the market closed, Fastly disclosed, include production timing delays, lower-thanhosted an earnings call for its 2Q 2020 results, during anticipated manufacturing yields, longer manufacturingwhich Fastlys CEO revealed for the first time that throughput times, and product defects and errataByteDance was the companys largest customer. among other risk factors.Fastlys CEO then admitted that [a]ny ban of the TikTok On July 23, 2020, Intel publicly announced that itapp by the US would create uncertainty around our identified a defect mode in its 7-nanometer processability to support this customer. While we believe we that resulted in yield degradation and that it hadare in a position to backfill the majority of this traffic invested in a contingency plan but that its productin case they are no longer able to operate in the US, timing would shift by about six months. Part of thethe loss of this customers traffic would have an impact contingency plan, Intel revealed, was that it wouldon our business. Fastlys share price fell $19.28, from begin outsourcing production to third-party foundries$108.92 at the close of the previous trading day to with greater production capabilities. Intels stock price$89.64 on August 6, 2020. The same day, former declined 17.93% the next trading day.president Trump issued an executive order that would On July 28, 2020, an investor filed a putative classprohibit any U.S. company or person from transacting action lawsuit against Intel and its officers allegingwith ByteDance. Fastlys stock price dropped anotherviolations of Sections 10(b) and 20(a) of the 1934 Act$10.31 per share from the closing price on August 6, and Rule 10b-5 promulgated thereunder. The complaint2020 to close at $79.33 on August 7, 2020.asserts that Intel failed to timely disclose it hadOn August 27, 2020, a shareholder filed a putative class identified the defect mode in its 7-nanometer processaction alleging violations of Sections 10(b) and 20(a) of the that would cause a six-month delay in its production1934 Act, as well as Rule 10b-5 promulgated thereunder, schedule, that Intel was reasonably likely to rely onby Fastly and certain of its officers. At core, plaintiff third-party foundries for manufacturing its 7-nanometeralleged that defendants made false and misleading products, and that this reliance was reasonably likelystatements in violation of the PSLRA by failing to disclose to result in a loss of market share. On September 16,Fastlys business relationship with ByteDance, which, at 2020 the case was consolidated with two other casesthe subject time period, served as the operating entity of and on October 20, 2020 the court appointed a leadTikTok. On September 15, 2020 another investor filed plaintiff, which filed a consolidated amended complainta putative class action naming the same defendants and on January 15, 2021. Defendants motion to dismiss isasserting similar legal theories.due by March 16, 2021, and the hearing on that motionOn October 27, 2020, the court consolidated the to dismiss is tentatively set for June 10, 2021.two related actions. On February 10, 2021, the court appointed a lead plaintiff and lead counsel. In re Fastly, Inc. Securities Litigation, Case No. 4:20cv6024 (N.D. Cal.) Regulatory Risks of Biggest Customer Fastly, Inc. (Fastly) is a cloud-computing service provider. The company purportedly enables customers to create digital experiences quickly, securely, and reliably by processing, serving, and securing [its] customers applications as close to their end-users as 59'