The litigation, filed in the Northern District of Illinois as Yappi v. Wix.com Ltd., follows a 27% drop in the company's share price last May. The complaint alleges that Wix overstated the competitive performance of its AI platforms, Harmony and Base44, while simultaneously understating the significant development and marketing costs required to sustain them. These initiatives, intended to counter the rise of "vibe coding," ultimately caused non-GAAP operating expenses to spike 46% year-over-year.

By May 2026, the financial strain became clear as Wix reported a surge in sales and marketing expenses to $190.7 million—an 88% increase from the previous year. This expenditure caused the company’s non-GAAP operating margin to collapse from 21% to 5%. During the subsequent earnings call, management admitted that the Harmony platform lacked key capabilities and that professional developers were migrating to competing tools. The disclosure wiped more than $1.1 billion from the company's market capitalization in a single session.

Hagens Berman, the law firm leading the investigation, claims Wix intentionally obscured the adverse effects these AI projects had on its core business. Investors who suffered substantial losses are being urged to contact the firm before the court-imposed deadline. The investigation also invites potential whistleblowers with non-public information to come forward, citing the possibility of rewards under SEC programs for those who assist in the recovery of damages.