Initial Lawsuit
A Talkspace shareholder filed a securities class action lawsuit against Talkspace on behalf of all holders of Talkspace common stock (as of the record date for the special meeting of shareholders held on June 17, 2021) to consider approval of the merger between Hudson Executive Investment Corporation and Talkspace, and entitled to vote on the merger.
- Filing Date
01/07/2022 - Transgression
Securities Violation - Filing Firms
Robbins Geller Rudman & Dowd LLP - Case Title
Baron v. Talkspace, Inc. - Docket Number
1:22-cv-00163 - Court
New York Southern District Court - Free File
Complaint
Allegations
According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors:
(a) that Talkspace was experiencing significantly increased online advertising costs in its B2C business since the beginning of 2021;
(b) that Talkspace was experiencing lower conversion rates in its online advertising in its B2C business;
(c) that, as a result of (a) and (b) above, Talkspace was experiencing increased customer acquisition costs and more tepid B2C demand than represented to investors;
(d) that, as a result of (a)-(c) above, Talkspace was suffering from ballooning customer acquisition costs and worsening growth and gross margin trends;
(e) that Talkspace had overvalued its accounts receivables from certain of its health plan clients in its B2B business, which amounts required adjusted downward; and
(f) that, as a result of (a)-(e) above, Talkspace’s 2021 financial guidance was not achievable and lacked any reasonable basis in fact.
Defendants
- Company
Talkspace, Inc. (formerly Hudson Executive Investment Corporation, traded under "HEIC") - Chief Executive Officer
Oren Frank - Chief Financial Officer
Mark Hirschhorn - Company
HEC Sponsor LLC - Chairman
Douglas L. Braunstein - Chief Executive Officer
Douglas G. Bergeron - Chief Financial Officer
Jonathan Dobres - Director
Robert Greifeld - Director
Amy Schulman - Director
Thelma Duggin - Company
Hudson Executive Capital LP - Company
HEC Master Fund LP
