Sprout Social, Inc. is facing an investigation by Kuehn Law, PLLC, a shareholder litigation firm, regarding potential breaches of fiduciary duties by certain officers and directors. The investigation stems from a federal securities lawsuit alleging that company insiders misrepresented or failed to disclose critical information to shareholders.
The lawsuit claims that Sprout Social's sales and revenue growth were not accurately indicative of its transition to an enterprise sales cycle. Furthermore, it alleges that the company encountered integration challenges with its acquisition of Tagger, an influencer marketing and social intelligence platform.
These alleged issues led to "self-inducing sales headwinds" and a subsequent revision of fiscal year 2024 revenue guidance. The lawsuit contends that positive statements made by the company about its business, operations, and prospects were materially misleading or lacked a reasonable basis.
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