NEW YORK, Feb. 29, 2024 (GLOBE NEWSWIRE) — Attorney Advertising–Bronstein, Gewirtz & Grossman, LLC, a nationally recognized law firm, notifies investors 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) and certain of its officers.
Class Definition:
This lawsuit seeks to recover damages against Defendants for alleged violations of the federal securities laws on behalf of all persons and entities that purchased or otherwise acquired Nextdoor securities between July 6, 2021 and November 8, 2022, inclusive (the “Class Period”). Such investors are encouraged to join this case by visiting the firm’s site: bgandg.com/KIND.
Case Details:
Nextdoor operates a hyperlocal online social networking platform that connects neighbors, public agencies, and businesses via the internet.
Nextdoor was created on November 5, 2021, through the merger of a privately held company called Nextdoor, Inc. (“Nextdoor Private”) and a publicly traded special purpose acquisition company (SPAC or blank-check company) then called Khosla Ventures Acquisition Co. II (“KV Acquisition Co.”). KV Acquisition Co. served as the surviving entity and changed its name to Nextdoor Holdings, Inc. after the merger.
On Nextdoor’s platform, “neighbors” (i.e., users) can view posts, discussions, and pictures from other neighbors, as well as notifications, comments, and groups. These features enable users to exchange information, services, and goods. Thus, the value of Nextdoor’s advertising space–and its business, financial, and operational performance–is ultimately dependent on the size and level of engagement of the Company’s user base.
On March 1, 2022, Nextdoor reported its financial results for the quarter during which the Merger was completed. Contrary to defendants’ prior claims that accelerating growth trends were being sustained, the Company 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 advance of the November 2, 2021, special meeting.
In addition, Nextdoor reported quarterly average revenue per weekly active user (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 the Company’s ability to monetize its platform was faltering. On this news, the price of Nextdoor common stock declined approximately 14%, from $6.24 on March 1, 2022, to $5.39 on March 4, 2022.
Then, on May 10, 2022, Nextdoor revealed that its global weekly active users (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%.
Next, 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%.
In total, the price of Nextdoor Class A common stock fell nearly 90% from the $18.59 per share price high immediately after the Merger, causing investors to suffer millions of dollars in losses and economic damages under the federal securities laws.
The Complaint alleges that throughout the Class Period Defendants made statements that were materially false and/or misleading when made because they failed to disclose the following adverse facts pertaining to Nextdoor and Nextdoor Private’s business, operations, and financial condition, which were known to defendants or recklessly disregarded by them:
(1) that 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;
(2) that, rather than being sustained, such growth trends had already begun reversing at the start of the Class Period;
(3) that Nextdoor’s total addressable market was materially smaller than the 312 million households represented to investors;
(4) that, by the start of the Class Period, Nextdoor’s most important market–the U.S. market–was already substantially saturated, impairing the Company’s ability to monetize users and increase its ARPU or U.S. WAUs; and
(5) that, because of (1)-(4) above, Nextdoor’s revenue guidance for fiscal year 2022 had no reasonable basis in fact and the Company was tracking tens of millions of dollars below the revenue trajectory provided to investors.
What’s Next?
A class action lawsuit has already been filed. If you wish to review a copy of the Complaint, you can visit the firm’s site: bgandg.com/KIND or you may contact Peretz Bronstein, Esq. or his Law Clerk and Client Relations Manager, Yael Nathanson of Bronstein, Gewirtz & Grossman, LLC at 332-239-2660. If you suffered a loss in Nextdoor you have until April 29, 2024, to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff.
There is No Cost to You
We represent investors in class actions on a contingency fee basis. That means we will ask the court to reimburse us for out-of-pocket expenses and attorneys’ fees, usually a percentage of the total recovery, only if we are successful.
Why Bronstein, Gewirtz & Grossman:
Bronstein, Gewirtz & Grossman, LLC is a nationally recognized firm that represents investors in securities fraud class actions and shareholder derivative suits. Our firm has recovered hundreds of millions of dollars for investors nationwide.
Attorney advertising. Prior results do not guarantee similar outcomes.
Contact:
Bronstein, Gewirtz & Grossman, LLC
Peretz Bronstein or Yael Nathanson
332-239-2660 | info@bgandg.com
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