Please complete this form relating to your transactions for TaskUs, Inc. (NASDAQ: TASK) securities between June 11, 2021 and January 19, 2022, inclusive (the “Class Period”).
You may also contact James Maro, Esq. (484) 270-1453; or you may submit your information via email at email@example.com; or you may click here to print a PDF of this form.
TaskUs investors may receive additional information about the case by clicking the link "Submit Your Information" above. If you are a member of the class described below, you may no later than April 25, 2022 move the Court to serve as lead plaintiff of the class, if you so choose.
A class action lawsuit has been filed on behalf of those who purchased or acquired TaskUs, Inc. (“TaskUs”) (NASDAQ: TASK) securities between June 11, 2021 and January 19, 2022, inclusive (the “Class Period”)
TaskUs is a business process outsourcing company focused on providing three key services to technology companies: (1) Digital Customer Experience, specifically digital customer support services offered via email, chat, in-app messaging, and other non-voice channels; (2) Content Security, specifically the review and disposition of user and advertiser generated content; and (3) Artificial Intelligence Operations, primarily consisting of data labeling, annotation, and transcription services. TaskUs held its initial public offering (“IPO”) on June 10, 2021, offering and selling 5,553,154 shares of Class A common stock priced at $23 per share, and certain selling stockholders sold an additional 9,626,846 shares of Class A common stock. TaskUs completed the IPO on June 15, 2021, receiving net proceeds of $120.7 million.
In the offering documents for the IPO, TaskUs repeatedly claimed to have “industry-leading growth and profitability” and insisted that its “market opportunity is over $100 billion.” TaskUs supported these claims, in part, with market data that showed “the content moderation solutions market was $5.3 billion in 2020” and estimated to “grow at a CAGR [compound annual growth rate] of 40-50% from 2016 to 2021” as well as by touting the revenue generated from its largest client, Facebook, Inc. (“Facebook”). Additionally, TaskUs overstated the size of its workforce, and touted its “low employee attrition levels” which “leads to lower hiring and training costs and higher employee productivity.” Throughout the Class Period, TaskUs continued to assert that its “market opportunity . . . is simply massive,” and the “market across the specialized services we deliver is over $100 billion, and demand for some of these services is growing up to 50% annually. So we are just getting started.” TaskUs also specifically touted “continued revenue growth from our top 2 clients” and asserted that “our largest customer [Facebook] saw improved revenue concentration, which was 32% in 2020. In Q1 of 2021, it was 29%, and then in Q2 of 2021, it was 27%. So while that client is continuing to grow very aggressively, the rest of the business is outpacing their growth.”
The truth about TaskUs emerged on January 20, 2022, when Spruce Point Capital Management, LLC issued an 80-page report on TaskUs titled “Moderating the Bull Case Content” (the “Spruce Point Report”) based on its “forensic financial and accounting review” of TaskUs. The Spruce Point Report stated, 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. With 28% of sales to Facebook and related to the controversial area of ‘Content Moderation’ we find evidence of increasing financial strain in the relationship and believe margins and cash flow are set to contract more than expected.” The Spruce Point Report also stated, “we find a pattern of embellishing the size of its workforce and making overly optimistic revenue growth claims.” Following this news, the price of TaskUs stock fell $5.46 per share, or more than 15%, from $35.59 per share on January 19, 2022, to $30.13 per share at the close of trading on January 20, 2022.
The complaint alleges that throughout the Class Period, the defendants failed to disclose to investors 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 the defendants represented and the defendants’ representations were based on outdated market data; (3) TaskUs improperly recognized revenue from certain key contracts; (4) the defendants overstated the size of TaskUs’ workforce as well as employee retention rates, and understated attrition rates; and (5) as a result of the foregoing, the defendants’ positive statements about TaskUs’ business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis.
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case. Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP: James Maro, Esq. (484) 270-1453 or via e-mail at firstname.lastname@example.org. If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.