Fastly (NYSE:FSLY), a U.S. cloud computing company, is facing a class-action lawsuit over its ties to TikTok.
Here’s what investors need to about the class-action lawsuit against Fastly.
- The lawsuit comes after the revelation that ByteDance, the owner of TikTok, was one of its largest customers.
- This was revealed during its second-quarter earnings call.
- The company also noted that TikTok was responsible for 12% of its total revenue in the last six months.
- Following this news, Fastly saw its stock drop by 17.7% from its previous close.
- This lawsuit alleges that Fastly made misleading statements or failed to disclose ByteDance was its largest customer.
- The reason behind the negative reaction to this was likely increasing scrutiny of the TikTok app.
- It also claims that Fastly didn’t inform investors about the possible dangers of actions against ByteDance or TikTok from the U.S. Government.
- Finally, the class-action lawsuit alleges that this resulted in misleading statements from Fastly concerning its positive business and operations.
- The lawsuit claims that this has the company violating the Securities Exchange Act of 1934.
- It affects anyone that bought or acquired Fastly securities from May 6, 2020, to August 5, 2020.
- Law firms are seeking a lead plaintiff for the class-action lawsuit against FSLY.
- Plaintiffs have until Oct. 26 to step up as a lead plaintiff in the case.
- Otherwise, they will continue to remain as an absent class member.
FSLY stock was up 14% as of Wednesday afternoon.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.