Two US law firms probe Atlassian after Citi downgrade sparks share slump
Two law firms in the United States have launched investigations into Sydney-based Atlassian Corporation following a sharp decline in the software maker's share price after a Wall Street analyst cut their target on the stock in January.
Los Angeles-based Portnoy Law Firm says it has opened an investigation into possible securities fraud at Atlassian and may file a class action on behalf of investors in the company, which trades on the Nasdaq under the ticker TEAM.
New York-based Pomerantz LLP has separately announced that it is investigating claims on behalf of Atlassian investors to determine whether the company and certain officers or directors engaged in securities fraud or other unlawful business practices.
Both investigations stem from a January 2026 research note by Citi, which slashed its price target on Atlassian shares to $210 from $240.
In the note, Citi analysts cited "pessimism on underlying cadence and quality of topline growth," pointing to concerns about the strength of the company's revenue trajectory and structural risks to its business model.
The Citi report also highlighted "perceived disruption by code assistant platforms" as a factor that has "exacerbated these existentially bearish concerns."
Following publication of the Citi report, Atlassian's stock fell $9.90, or 7.71%, to close at $118.55 on January 16, 2026, according to both firms.
"This revelation that emerging artificial intelligence technologies are viewed as a direct threat to Atlassian's core offerings led to an immediate loss of investor confidence and a rapid erosion of shareholder value as the market adjusted to the heightened competitive risk," said Portnoy Law in a media release.
Portnoy Law Firm said it is evaluating potential claims to help investors recover losses linked to the share-price drop, while Pomerantz is soliciting Atlassian shareholders to join a potential securities class action.
Atlassian has declined to comment in the announcements, the Australian Financial Review reported.
