Smartsheet (SMAR) Undisclosed Buyout Offer Buyback Case

Attorneys review the case details to decide whether to proceed with a class action.

S.D. New York

Court

1:26-cv-06679

Case number

06/01/2024

Class period Start

09/23/2024

Class period End

10/05/2026

Lead Plaintiff motion deadline

$SMAR sellers filed a claim against Smartsheet for repurchasing over a million of its own shares at deflated prices while concealing that a consortium of Blackstone and Vista Equity Partners had offered to acquire the company for $56.50 per share, well above what the Company was paying investors for their stock.
After Smartsheet disclosed that it had agreed to be acquired by the Blackstone/Vista consortium for $56.50 per share, $SMAR rose sharply, closing at $55.46 on September 24, 2024, a 6.5% single-day increase, capping a series of price jumps as details of the buyout talks leaked out.
$SMAR investors who sold shares during the Class Period can join this case to be notified about potential recovery.
Case Details:

Beginning in January 2024, a consortium of Blackstone and Vista Equity Partners approached Smartsheet with offers to acquire all of its outstanding stock, first at $56.25 per share and later raised to $56.50 per share. In April 2024, Smartsheet's board authorized a $150 million share buyback program, and beginning June 1, 2024, the Company started repurchasing its own stock even as it continued confidential negotiations and due diligence with the consortium.

However, investors allege that between June and August 2024, while Smartsheet knew the consortium was willing to pay $56.50 per share and was actively engaged in exclusivity discussions, due diligence, and merger negotiations, the Company repurchased more than 1.1 million of its own shares from unsuspecting sellers at an average price of roughly $44.34 per share, roughly 22% below the consortium's offer, without disclosing the pending acquisition talks. 

CFO Pete Godbole touted the buyback activity on earnings calls during this period while omitting any mention of the consortium's offers.

Then, beginning in mid-July 2024, media reports gradually revealed that Smartsheet had attracted buyout interest, with Reuters and Bloomberg publishing a series of articles between July and September confirming discussions with Blackstone and Vista and financing details for a potential deal. 

Finally, on September 24, 2024, Smartsheet announced it had signed a definitive merger agreement to be acquired for $56.50 per share. $SMAR rose to close at $55.46 per share, up 6.5% on the day, reflecting the premium value that had been concealed from sellers throughout the Class Period.

Based on these events, $SMAR sellers filed a claim against Smartsheet, alleging the company:
It repurchased over a million of its own shares from investors at prices it knew were far below their true value.
It concealed the consortium's credible acquisition offers while continuing to buy back stock on the open market.
It caused sellers to part with their shares at artificially deflated prices before the buyout was disclosed.
Investors argue Smartsheet misled sellers about the true value of its stock by concealing the consortium's buyout offers, causing losses when the acquisition was finally announced.

Case Type

US Securities Class Action

Case Status

Attorney Investigation

Alleged Offence

Misleading Statements,

Failure to Disclose

Suspected Party

Directors,

Management

Security Type

Stocks

Trade Direction

Short

Shock Event Date

09/24/2024

Filing date

08/05/2026

Lead Plaintiff Deadline

10/05/2026