The law firm of Kirby McInerney LLP announces that a class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of those who acquired TaskUs, Inc. (“TaskUs” or the “Company”) (NASDAQ: TASK) securities from June 11, 2021 to January 19, 2022, inclusive (the “Class Period”). Investors have until April 25, 2022 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
TaskUs is a business process outsourcing company that provides services to technology companies, including the moderation of user and advertiser generated content.
On January 20, 2022, Spruce Point Capital Management, LLC (“Spruce Point”) issued a report titled “Moderating the Bull Case Content” based on its “forensic financial and accounting review” of TaskUs. Spruce Point found that TaskUs, “has a pattern of exaggerated and inflated business claims, including revenue, and is covering-up financial strain with reduced disclosures, cherry-picked market data, and non-standard key performance metrics.” Additionally, Spruce Point stated, “we find evidence of increasing financial strain in the relationship” between TaskUs and its largest customer Facebook “and believe margins and cash flow are set to contract more than expected.” Spruce Point also stated, “we find a pattern of [TaskUs] embellishing the size of its workforce and making overly optimistic revenue growth claims.” On this news, the price of TaskUs stock declined by $5.46 per share, or approximately 15.3%, from $35.59 per share to close at $30.13 per share on January 20, 2022.
The lawsuit alleges throughout the Class Period, Defendants made false and/or misleading statements and/or failed to disclose that: (1) TaskUs was experiencing severe financial strain and business challenges, particularly with its most important customer Facebook; (2) the Content Security market was smaller than Defendants represented and Defendants’ representations were based on outdated market data; (3) TaskUs improperly recognized revenue from certain key contracts; (4) Defendants overstated the size of TaskUs’ workforce as well as employee retention rates, and understated attrition rates; and (5) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis.
If you purchased or otherwise acquired TaskUs securities, have information, or would like to learn more about these claims, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this contact form, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website: http://www.kmllp.com.
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