On Friday, Bumble, Inc. shareholders filed an opposition motion to the Southern District of New York requesting the court to deny Bumble, Inc. and its affiliated defendants’ motion to dismiss in the securities class action case In re Bumble, Inc. Securities Litigation.
As previously covered by Law Street Media, this case concerns whether Bumble, a dating app, misled the public in its secondary public offering (SPO). The class action by institutional investors accuses Bumble, its CEO and CFO, Blackstone Inc., which has a controlling interest in the company and more than 20 underwriting firms who sponsored the SPO, of misleading investors about Bumble’s growth through the SPO Registration Statement, Prospectus and other Bumble SEC filings.
On November 18, 2022, the defendants filed a motion to dismiss the suit arguing that the statements at issue constitute “non-actionable puffery,” as reported by Law Street Media. Bumble argues that the alleged false or misleading statements were optimistic projections and too broad to be construed as a material statement. Additionally, Bumble argued that the SPO contained adequate warning regarding potential risks and how they could affect investor profits. Lastly, Bumble argued that the court should dismiss the charges against the Blackstone defendants on the grounds that their affiliation is not specifically alleged.
The shareholders responded with their opposition reaffirming their position that the SPO false and misleading statements specifically regarding its growth prospects and the growth of paying users and Bumbles historical results statements. Additionally, the lead plaintiff purports that Bumble’s argument that the contested statements are opinions or puffery fails because they are statements of fact. Further, the motion states that warnings Bumble provided were misleading risk statements as they were presented as hypotheticals even though in reality the risks had materialized by the time of the SPO.
In closing, the lead plaintiff argues that their control person claim should be sustained and that the Blackstone defendants remain a party to the case because the SPO Offering document admits that “Bumble Inc. is controlled by investment funds of Blackstone Inc.” Further, it contends that each of the Blackstone defendants named in the complaint were explicitly named in the SPO Registration Statement.
Therefore, the lead plaintiff requested that the Southern District of New York deny the defendants’ motion to dismiss and stated that if the court grants the motion in part or whole, the plaintiffs request leave to amend their complaint.
The lead plaintiff is represented by Bernstein Litowitz Berger & Grossman LLP and Klausner, Kaufman, Jensen & Levinson, and the defendants are represented by Simpson Thacher & Bartlett LLP and Shearman & Sterling, LLP.
