NEW YORK--(BUSINESS WIRE)--The law firm of Kirby McInerney LLP reminds investors that a class action lawsuit has been filed in the U.S. District Court for the Northern District of California on behalf of those who acquired Nextdoor Holdings, Inc. (formerly known as Khosla Ventures Acquisition Co. II) (“Nextdoor” or the “Company”) (NYSE:KIND) securities during the period of July 6, 2021 through November 8, 2022, inclusive (“the Class Period”). Investors have until April 29, 2024 to apply to the Court to be appointed as lead plaintiff in the lawsuit.
[Click here to learn more about the class action]
On March 1, 2022, Nextdoor reported that its revenue growth rate in the fourth quarter of 2021 had declined sequentially by 18%, down from the 66% growth rate reported in the most recent quarter to 48%. 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 12% year-over-year growth, which indicated that Nextdoor’s ability to monetize its online platform was faltering. On this news, the price of Nextdoor shares fell by $, or approximately 11%, from $ 6.24 per share on March 1, 2022 to close at $6.09 on March 2, 2022.
Then, on May 10, 2022, Nextdoor reported 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 declined by approximately one hundred thousand users. On this news, the price of Nextdoor shares fell by $, or approximately 11%, from $3.19 per share on May 10, 2022 to close at $2.93 on May 11, 2022.
Afterwards, on August 9, 2022, Nextdoor revealed that revenue growth slowed to 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 shares fell by $0.90, or approximately 25%, from $3.60 per share on August 9, 2022 to close at $2.70 on August 10, 2022.
Finally, on November 8, 2022, Nextdoor reported that its revenues during the quarter declined sequentially by $1 million from $55 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 shares fell by $, or approximately 11%, from $2.32 per share on November 8, 2022 to close at $2.06 on November 9, 2022.
The lawsuit alleges 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 was already substantially saturated, impairing Nextdoor’s ability to monetize users and increase its average revenue per weekly active user or U.S. weekly active users.
If you purchased or otherwise acquired Nextdoor securities, have information, or would like to learn more about this investigation, please contact Thomas W. Elrod of Kirby McInerney LLP by email at investigations@kmllp.com, or by filling out this CONTACT FORM, to discuss your rights or interests with respect to these matters without any cost to you.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, antitrust, whistleblower, and consumer litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars. Additional information about the firm can be found at Kirby McInerney LLP’s website.
This press release may be considered Attorney Advertising in some jurisdictions under the applicable law and ethical rules.
