Gitlab (GTLB) Falls 7.8% as Founder, Board Face Lawsuit

GitLab Inc. (NASDAQ:GTLB) is one of the 10 Stocks Investors Are Dumping Right Now.

GitLab snapped a six-day winning streak on Wednesday, losing 7.82 percent to finish at $21.34 apiece, after an investor slapped one of its founders and members of the board for allegedly pushing the firm to implement a buyback program that would have him regain control of the firm without spending a penny.

A report by Bloomberg said that an investor sued GitLab Inc. (NASDAQ:GTLB) Chairman Sytse Sijbrandij and the company’s board members over a $400 million buyback program, alleging that the buyback was not only to boost shareholder value but to consolidate control, with his voting power expected to be pushed back above the 50 percent level.

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According to the complaint, the buybacks would immediately hike Sijbrandij’s ownership percentage by directly reducing the overall number of outstanding shares, while also delaying the sunset of his supervoting Class B shares.

As of writing, GitLab Inc. (NASDAQ:GTLB) has yet to issue a response in relation to the lawsuit.

Last month, GitLab Inc. (NASDAQ:GTLB) said that it would embark on a $400 million repurchase program as a reflection of confidence in the company’s long-term growth trajectory and commitment to delivering shareholder value.

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