SAN FRANCISCO (Legal Newsline) - A federal judge has thrown out a shareholder lawsuit against Atlassian, a maker of collaboration and project-management software that suffered a 29% stock decline in 2022.
Judge William Orrick on Jan. 22 granted the company's motion to dismiss but allowed lead plaintiff counsel at Saxena White 21 days to file an amended complaint. Orrick picked apart the class action complaint in a 25-page order, finding four statements made by the company did not mislead investors.
Atlassian generates revenue from license subscriptions. The plaintiffs claim that in the spring and summer of 2022, "macroeconomic conditions" deteriorated and caused the company's competitors to lower its revenue guidance.
The plaintiffs further claim Atlassian failed to disclose the impact on the company, overstated its financial guidance and concealed "slowing conversions" from free users and paying customers as well as the slowing growth of "in paying-user expansion."
One contested statement came from an Aug. 4, 2022, call, when an Atlassian rep was asked "Has there been any change to the mix of products sold over the last few months? Anything different with regard to customer prioritization?"
Cameron Deatsch, the chief revenue officer, replied, "We have not seen any significant shift in customer demand across our product lines."
The company later admitted to a slowdown across its customer base that began the month before.
"At most, it shows that there was a slowdown in Free to Paid Conversions in early Q1, and the defendants told investors of this on August 4," Orrick wrote.
"The rest of the Nov. 4 transcript shows that the Paid User Expansion slowdown began in the second half of Q1, after the Aug. 4 call. Because that would mean that shift in customer demand occurred after "the statement) was made, the plaintiffs fail to plead that (the statement) contradicted anything that the defendants knew at the time."