Slack Technologies v. Pirani

In Slack's direct listing, both registered shares governed by the defective registration statement and unregistered previously-issued shares traded indistinguishably on the open market, creating a commingling that prevented any aftermarket purchaser from identifying the source of their holdings. Pirani's purchase of shares in the secondary market left him unable to trace his specific shares to the registered tranche covered by Section 11, since shares from both tranches were simultaneously trading at the same price and in the same venue. The Court found this factual inability to connect his purchase to the defective registration statement dispositive: the traceability requirement, inherent to Section 11's text, could not be satisfied where a plaintiff could not plausibly allege his shares "issued pursuant to" the challenged offering. The direct listing structure thus created an insuperable barrier to Section 11 liability for all aftermarket purchasers, regardless of whether the registration statement contained material misstatements.