NEW YORK, Feb. 29, 2024 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized stockholder rights law firm, announces that a class action lawsuit has been filed against Nextdoor Holdings, Inc. f/k/a Khosla Ventures Acquisition Co. II (“Nextdoor” or the “Company”) (NYSE: KIND) in the United States District Court for the Northern District of California on behalf of all persons and entities who purchased or otherwise acquired Nextdoor publicly traded Class A common stock between July 6, 2021 and November 8, 2022, both dates inclusive (the “Class Period”). Investors have until April 29, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
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Nextdoor operates a hyperlocal online social networking platform that connects neighbors, public agencies, and businesses via the internet. Nextdoor was created through the November 5, 2021 merger of a privately held company called Nextdoor, Inc. and a publicly traded special purpose acquisition company (SPAC or blank-check company), then called Khosla Ventures Acquisition Co. II (“KV Acquisition Co.”), with KV Acquisition Co. serving as the surviving entity and changing its name to Nextdoor Holdings, Inc. after the merger.
The Nextdoor class action lawsuit alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (i) Nextdoor’s financial results prior to the merger had been temporarily inflated by the ephemeral effects of the COVID-19 pandemic, which had pulled forward demand for Nextdoor’s platform and cannibalized future advertising revenue growth; (ii) rather than being sustained, such growth trends had already begun reversing at the start of the Class Period; (iii) Nextdoor’s total addressable market was materially smaller than the 312 million households represented to investors; and (iv) by the start of the Class Period, Nextdoor’s most important market – the U.S. market – was already substantially saturated, impairing Nextdoor’s ability to monetize users and increase its average revenue per weekly active user (“ARPU”) or U.S. weekly active users (“WAUs”).
On March 1, 2022, Nextdoor reported that the revenue growth rate in the fourth quarter had declined sequentially by 18% to 48% year-over-year growth, down from the 66% growth rate in the most recent quarter reported to investors. In addition, Nextdoor reported quarterly ARPU of $1.65, revealing that the ARPU growth rate in the quarter had declined substantially by 26% to just 12% year-over-year growth from 38% growth in the third quarter, which indicated that Nextdoor’s ability to monetize its platform was faltering. On this news, the price of Nextdoor Class A common stock declined approximately 14%.
Then, on May 10, 2022, Nextdoor revealed that its global WAUs growth had increased just 1% sequentially (from 32% year-over-year growth in the fourth quarter of 2021 to 33% year-over-year growth in the first quarter of 2022) and that U.S. WAUs had actually suffered a sequential decline of approximately one hundred thousand users. On this news, the price of Nextdoor Class A common stock fell approximately 8%.
Thereafter, on August 9, 2022, Nextdoor revealed that its platform continued to materially decline, reporting that revenue growth slowed to just 19% year-over-year during the quarter and that Nextdoor’s U.S. WAUs had declined for the second quarter in a row to 29.2 million. On this news, the price of Nextdoor Class A common stock fell approximately 25%.
Finally, on November 8, 2022, Nextdoor reported that its revenues during the quarter declined sequentially by $1 million to $54 million, representing just 2% year-over-year growth, and that Nextdoor’s quarterly ARPU growth was increasingly negative, contracting by 12% compared to the prior year quarter. On this news, the price of Nextdoor Class A common stock fell approximately 11%, further damaging investors.
If you purchased or otherwise acquired Nextdoor shares and suffered a loss, are a long-term stockholder, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
