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Published January 3, 2025
When Five9, Inc. issued sky-high financial projections, investors’ hopes were in the clouds. After the Company’s executives slashed those projections just months later, investors dumped their shares, sending Five9’s stock price crashing and triggered a lawsuit by shareholders seeking to recover their losses.
Five9 provides software for cloud-based business centers. In June 2024, the Company’s executives said the Company was on track for 16% revenue growth, regardless of the economic environment. The Company’s CEO said he was certain the Company was on track for an especially strong back half of the year. According to the lawsuit, however, Five9’s executives knew better because the Company was in the midst of a slowdown. In August, the Company released its quarterly financials and slashed its projections due to “uncertain economic conditions” and stated that the back half of the year looked to be challenging.
Stunned investors quickly sold off their shares, sending Five9’s stock price tumbling. Now, some of those investors are joining the lawsuit.