Facts

Affirm Holdings, Inc., operates a credit card alternative which allows consumers to pay for purchases over time.

Lead plaintiff Eric Nunez brought a securities class action against Affirm, Affirm's chief executive officer and the chairman of the company's board of directors, Max Levchin; and Affirm's chief financial officer, Michael Linford. The class consisted of all persons and entities who purchased or otherwise acquired Affirm securities during the class period.

PLAINTIFF'S CONTENTIONS: Plaintiff contended that Affirm's spokesperson published a tweet on the company's official Twitter account, emphasizing the company's growth in the prior quarter, which caused the company's stock to jump by 11 percent during intraday trading. But, the tweet was false and misleading in that defendants knowingly, or with deliberate recklessness, omitted material information. Not only did defendants make a false or misleading statement with the tweet, defendants also demonstrated their awareness of the misstatement by deleting the tweet. Furthermore, defendants deleted the tweet sub silentio and therefore violated its duty to correct the misleading statements and omissions in the tweet that it deleted. After the deletion, but before the company published its second quarter earnings press release, investors continued to rely on the misleading tweet as relevant information. On news of the omitted earnings and revenue information, Affirm's share price dropped approximately 32 percent. As a result of defendants' wrongful acts and omissions, and the resulting precipitous decline in the market value of the company's securities, plaintiff and class members suffered significant losses and damages.

DEFENDANTS' CONTENTIONS: Defendants denied all contentions. Defendants quickly taking down the tweet and accelerating the earnings release created a far more compelling inference that the company reacted quickly to correct a mistake that was embarrassing but not nefarious.

Result

The court granted the defendants' motion to dismiss.