Skip to main content

UPDATE: Robbins Geller Rudman & Dowd LLP Announces Expansion of the Talkspace, Inc. Class Action Lawsuit and Announces Opportunity for Investors With Substantial Losses to Lead Case

Robbins Geller Rudman & Dowd LLP announces that the Talkspace class action lawsuit now seeks to represent: (1) holders of Talkspace, Inc. (NASDAQ: TALK) 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 Talkspace and Hudson Executive Investment Corporation (“HEIC”) and entitled to vote on the merger; and/or (2) purchasers of Talkspace securities between June 11, 2020 and November 15, 2021, inclusive (the “Class Period”). Robbins Geller initiated the Talkspace class action lawsuit, captioned Baron v. Talkspace, Inc., No. 22-cv-00163 (S.D.N.Y.), on January 7, 2022 charging Talkspace and other defendants with violations of the Securities Exchange Act of 1934. A similar lawsuit – Valdez v. Talkspace, Inc., No. 22-cv-00840 (S.D.N.Y.) – is also pending.

The Baron plaintiff is represented by Robbins Geller, which has extensive experience in prosecuting investor class actions including actions involving financial fraud. You can view a copy of the complaint by clicking here.

If you suffered significant losses and wish to serve as lead plaintiff of the Talkspace class action lawsuit, please provide your information by clicking here. You can also contact attorney J.C. Sanchez of Robbins Geller by calling 800/449-4900 or via e-mail at Lead plaintiff motions for the Talkspace class action lawsuit must be filed with the court no later than March 8, 2022.

CASE ALLEGATIONS: Talkspace is a behavioral healthcare company that markets itself as being enabled by a “purpose-built technology platform.” Talkspace’s platform serves two different business channels: (i) business-to-consumer (“B2C”), comprised of individual consumers who subscribe directly on Talkspace’s platform; and (ii) business-to-business (“B2B”), comprised of large enterprise clients such as Google and Expedia and large health plans and employee assistance programs. Talkspace began as HEIC, a blank check company (also known as a special purpose acquisition company, or SPAC) formed by HEC Sponsor LLC, the blank check sponsor. On January 13, 2021, HEIC announced that it had entered into a merger agreement with Talkspace. On May 28, 2021, defendants issued the final proxy statement for the merger which urged shareholders to vote in favor of the deal.

The Talkspace class action lawsuit alleges that the final proxy statement contained numerous materially false and misleading statements and omissions as detailed below. Specifically, the final proxy statement misrepresented Talkspace’s business, financials, and prospects, by omitting, among other things, that: (i) Talkspace was experiencing significantly increased online advertising costs in its B2C business since the start of 2021; (ii) Talkspace was experiencing lower conversion rates in its online advertising in its B2C business; (iii) Talkspace was experiencing increased customer acquisition costs and more tepid B2C demand than represented to investors; (iv) Talkspace was suffering from ballooning customer acquisition costs and worsening growth and gross margin trends; (v) Talkspace had overvalued its accounts receivables from certain of its health plan clients in its B2B business, which amounts required adjustment downward; and (vi) as a result, Talkspace’s 2021 financial guidance was not achievable and lacked any reasonable basis in fact.

On August 9, 2021, Talkspace revealed some issues relating to increased customer acquisition costs due to rising digital advertising costs while downplaying their impact, and confirmed a material increase in customer acquisition costs since the beginning of the year. On this news, Talkspace’s stock price fell by nearly 19%.

Then, on November 15, 2021, Talkspace issued a press release announcing Talkspace’s financial results for the third quarter of 2021 and revealing, among other things, that “[i]n the third quarter we increased the allowance for credit losses on receivables by $3.4 million, of which $2.8 million related to prior quarters” and that “Q3 Net Revenue came in below management expectations due to a lower number of B2C customers and a one-time non-cash reserve adjustment for credit losses on receivables related to prior periods.” Talkspace also announced that day that effective immediately Talkspace’s co-founder, CEO, and board member, defendant Oren Frank, was stepping down. Likewise, his wife Roni Frank would also be stepping down from her position as Head of Clinical Services and board member. On this news, Talkspace’s stock price fell by more than 36%, further damaging investors.

Subsequent to, and due to, the closing of the merger, the price of Talkspace common stock declined precipitously as the truth about Talkspace and the final proxy statement’s false and misleading nature were revealed over time. By December 30, 2021, the price of Talkspace common stock was trading below $2 per share, 80% below the price shareholders would have received if they had redeemed their shares instead of approving the merger less than one year earlier.

THE LEAD PLAINTIFF PROCESS: The Private Securities Litigation Reform Act of 1995 permits any investor who (1) held 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 and entitled to vote on the merger and/or (2) purchased Talkspace securities during the Class Period to seek appointment as lead plaintiff in the Talkspace class action lawsuit. A lead plaintiff is generally the movant with the greatest financial interest in the relief sought by the putative class who is also typical and adequate of the putative class. A lead plaintiff acts on behalf of all other class members in directing the Talkspace class action lawsuit. The lead plaintiff can select a law firm of its choice to litigate the Talkspace class action lawsuit. An investor’s ability to share in any potential future recovery of the Talkspace class action lawsuit is not dependent upon serving as lead plaintiff.

ABOUT ROBBINS GELLER RUDMAN & DOWD LLP: With 200 lawyers in 9 offices nationwide, Robbins Geller Rudman & Dowd LLP is the largest U.S. law firm representing investors in securities class actions. Robbins Geller attorneys have obtained many of the largest shareholder recoveries in history, including the largest securities class action recovery ever – $7.2 billion – in In re Enron Corp. Sec. Litig. The 2020 ISS Securities Class Action Services Top 50 Report ranked Robbins Geller first for recovering $1.6 billion for investors that year, more than double the amount recovered by any other securities plaintiffs’ firm. Please visit for more information.

Attorney advertising.

Past results do not guarantee future outcomes.

Services may be performed by attorneys in any of our offices.


Robbins Geller Rudman & Dowd LLP

655 W. Broadway, San Diego, CA 92101

J.C. Sanchez, 800-449-4900

Data & News supplied by
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.