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Shareholder Alert: Robbins Arroyo LLP Announces Farfetch Limited (FTCH) Sued for Misleading ShareholdersShareholder rights law firm Robbins Arroyo LLP announces that a purchaser of Farfetch Limited (NYSE: FTCH) has filed a class action complaint against the company for alleged violations of the Securities Act of 1933 pursuant to its September 2018 initial public offering ("IPO"). Farfetch provides an online marketplace for luxury goods. If you suffered a loss as a result of Farfetch's misconduct, click here. Farfetch Limited (FTCH) Accused of Misleading Investors in IPO According to the complaint, in September 2018, Farfetch sold approximately 50.88 million shares of Class A common stock at a price of $20 per share and raised proceeds of approximately $750.5 million. In its Registration Statement, Farfetch stated that "theglobal market for personal luxury goods was estimated to reach a record high of $307 billion in 2017" and touted a business model that allowed "for low expenditures, favorable working capital dynamics, minimal inventory holding, and an ability to drive stronger margins." However, Farfetch failed to acknowledge that large scale online wholesale was vulnerable to pricing pressures due to the pricing volatility and heavy promotions of luxury goods. These issues became evident on August 8, 2019, when Farfetch reported a larger-than-expected loss of $89.6 million for second quarter 2019, a 406.9% increase over the prior period, citing promotional discounting to compete with the heavy discounts offered by large online retailers as the reason. On this news, Farfetch's share price fell $8.12, or over 44%, to close at $10.13. Farfetch stock currently trades at around $9 per share, a 55% decline from its IPO price. Farfetch Limited (FTCH) Shareholders Have Legal Options
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Robbins Arroyo LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested. Click here to receive free alerts from Stock Watch when companies engage in wrongdoing. Attorney Advertising. Past results do not guarantee a similar outcome. View source version on businesswire.com: https://www.businesswire.com/news/home/20190919005942/en/ |
