© Reuters.
Bernstein Liebhard LLP, a law firm known for representing investors in securities class actions, has set a deadline of December 19, 2023 for investors to file a lead plaintiff motion in a lawsuit against Farfetch (NYSE:) Limited. The lawsuit alleges that the online luxury fashion platform violated the Securities Exchange Act of 1934 by making misleading statements about its business operations and financial health.
The period in question runs from March 9, 2023 to August 17, 2023, during which Farfetch is accused of hiding a significant recession in its key markets of the United States and China. Additionally, the company allegedly failed to report issues stemming from its partnership with Reebok and ongoing supply chain difficulties. These alleged misrepresentations came to light following Farfetch’s publication of its second quarter financial results on August 17, 2023.
In these results, Farfetch reported revenues of approximately $572 million, well below market expectations that had anticipated revenues close to $650.71 million. This shortfall led the company to adjust its full-year 2023 revenue forecast to around $2.5 billion, a figure that is below both its previous projection and average analyst estimates.
The subsequent market reaction was swift and severe. On Friday, August 18, 2023, Farfetch’s share price plummeted by more than 45%, closing at just $2.61 per share. This drastic drop represented a significant loss of value for shareholders and underlined the seriousness of the situation for investors.
Investors who purchased Farfetch securities within the identified time frame and have been affected by the stock’s decline may seek to participate in the class action as lead plaintiff. Bernstein Liebhard has an impressive track record of obtaining favorable recoveries for its clients, with more than $3.5 billion recovered since the company was founded in 1993.
Those considering taking on the role of lead plaintiff have until the December deadline to file their motions. This lawsuit serves as a critical reminder of the importance of transparency and corporate accountability, particularly within the volatile luxury fashion e-commerce landscape.
InvestingPro Insights
From the InvestingPro platform, we have some key data and tips that may shed more light on the Farfetch situation. As of Q2 2023, Farfetch had a market capitalization of $581.34 million, a negative P/E ratio of -0.65, and revenue of $2,351.01 million. The company’s operating income was in the red: -766.86 million dollars. The stock’s performance over the past three months has been notably poor, with a total return of -74.9%.
InvestingPro advice suggests Farfetch operates with a significant debt load and is rapidly burning through its cash. The stock has taken a big hit over the past week and is generally trading with high price volatility. These indicators align with recent lawsuit allegations and significant declines in key Farfetch markets.
For investors looking for deeper insights, InvestingPro offers a wealth of additional tips and metrics. For example, there are 15 more tips available for Farfetch and many other real-time metrics. These could provide a more complete understanding of the company’s financial health and market position.
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