Lawsuit filed for Investors who lost money with shares of Fastly, Inc. (NYSE: FSLY)

An investor, who purchased shares of Fastly, Inc. (NYSE: FSLY), filed a lawsuit over alleged violations of Federal Securities Laws by Fastly, Inc. in connection with certain allegedly false and misleading statements.

Investors who purchased shares of Fastly, Inc. (NYSE: FSLY) have certain options and for certain investors are short and strict deadlines running. Deadline: July 23, 2024. NYSE: FSLY investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.

San Francisco, CA based Fastly, Inc. operates an edge cloud platform for processing, serving, and securing its customer's applications in the United States, the Asia Pacific, Europe, and internationally. The edge cloud is a category of Infrastructure-as-a-Service that purportedly enables developers to build, secure, and deliver digital experiences. Fastly, Inc.'s platform includes a Content Delivery Network ("CDN"), or a geographically distributed network of proxy servers and their data centers. Content owners such as media companies and e-commerce vendors pay CDN operators to deliver their content to their end users. Certain companies have adopted a "Multi-CDN" framework which combines multiple CDNs from various providers into one large global network.

In 2023, a "consolidation trend" emerged in the CDN industry, in which several prominent Multi-CDN companies reduced the number of CDN vendors they had previously managed in an effort to simplify their operations and increase efficiency, opting instead to manage fewer CDN vendors. Facing reduced competition, Fastly, Inc. was able to materially increase its market share and drive favorable sequential growth.

Fastly, Inc. reported that its annual Total Revenue rose from $432.72 million in 2022 to $505.98 million in 2023, and that its Net Loss declined from $190.77 million in 2022 to $133.08 million in 2023.

On February 14, 2024, Fastly, Inc. issued a press release providing full year ("FY") 2024 revenue guidance in a range of $580 million to $590 million. In that same press release, Fastly's Chief Executive Officer was quoted as stating, "[t]his quarter demonstrated the progress we've made in operational and financial rigor resulting in strong gross margins and non-GAAP net income," and "[o]ur go-to-market, packaging and channel efforts through 2023 delivered an inflection in our customer acquisition as we closed out the year. This positions us well for 2024, driving our mission to make every user experience fast, safe, and engaging."

On May 1, 2024, Fastly, Inc. announced its first quarter ("Q1") 2024 financial results. Fastly, Inc. reported revenue of only $133.52 million, missing consensus estimates by $0.35 million. Fastly, Inc. also lowered its FY 2024 revenue guidance to a range of $555 million to $565 million, significantly below its previously issued FY 2024 revenue guidance of $580 million to $590 million, and likewise below consensus estimates of $584.62 million for the same period.
That same day, Fastly, Inc. held a conference call with investors and analysts to discuss the Company's Q1 2024 results (the "Q1 2024 Earnings Call"). In explaining the Company's disappointing revised FY 2024 outlook, the CEO of Fastly, Inc. stated that "[t]he biggest factor is a reduction of revenue from a small number of our largest customers. The first-quarter revenue from our top 10 customers dropped from 40% to 38%[,]" and that the Company saw "significant volatility" in the Multi-CDN strategy run by many of Fastly's top 10 accounts. Further, Fastly's Chief Financial Officer stated that the Company is "facing a challenging environment of revenue declines in our largest customers, overshadowing the impact of new customer acquisition and product pipeline[,]" and that the Company would not benefit in 2024 from the favorable impact of the early 2023 CDN consolidation that drove favorable sequential growth in the prior year same period.
Then, on May 2, 2024, Bank of America downgraded Fastly, Inc. stock from a "Buy" rating to an "Underperform" rating and cut its price target on the stock from $18 per share to a mere $8 per share, noting that "[d]ecelerating growth in Fastly's largest customers, share loss in delivery, and limited visibility in 2H cause us to question a rebound in 2024," and that "[w]hile we continue to like Fastly's positioning in the edge compute market, we see it as a 2025 opportunity instead of a near-term growth driver."

Shares of Fastly, Inc. (NYSE: FSLY) declined from $25.87 per share on February 12, 2024, to as low as $7.82 per share on May 30, 2024.

The plaintiff claims that between February 15, 2024 and May 1, 2024, the Defendants made false and/or misleading statements and/or failed to disclose that contrary to its representations to investors, Fastly was in fact experiencing a significant deceleration in growth among its largest customers and was losing the increased market share it had gained as a result of the 2023 CDN consolidation trend, that the foregoing issues were likely to have a material negative impact on the Company's revenue growth, that accordingly, the Company was unlikely to meet its own previously issued revenue guidance for FY 2024, that as a result, the Company's financial position and/or prospects were overstated, and that as a result, the Company's public statements were materially false and misleading at all relevant times.

Those who purchased shares of Fastly, Inc. (NYSE: FSLY) have certain options and should contact the Shareholders Foundation.

Contact:
Michael Daniels
Shareholders Foundation, Inc.
3111 Camino Del Rio North
Suite 423
San Diego, CA 92108
Tel: +1-(858)-779-1554
E-Mail: mail@shareholdersfoundation.com

About Shareholders Foundation, Inc.
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, and an investor advocacy group, which does research related to shareholder issues and informs investors of securities lawsuits, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigations, and/or settlements are not filed/initiated/reached and/or are not related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.

This release was published on openPR.