Shift4 Payments, Inc. (NYSE: FOUR)
NEW YORK, NY – August 24, 2023 – Wolf Haldenstein Adler Freeman & Herz LLP (“Wolf Haldenstein”) reminds investors that a class action has been filed in the United States District Court for the Eastern District of Pennsylvania on behalf of those who acquired Shift4 Payments, Inc. (“Shift4” or the “Company”) (NYSE: FOUR) securities during the period from November 10, 2021 through April 18, 2023, inclusive (the “Class Period”).
All investors who purchased shares and incurred losses are advised to contact the firm immediately at email@example.com or (800) 575-0735 or (212) 545-4774.
If you have incurred losses, you may, no later than October 19, 2023, request that the Court appoint you lead plaintiff of the proposed class. Please contact Wolf Haldenstein to learn more about your rights.
In Shift4’s third quarter of 2022, the Company completed its so-called mass strategic buyout program as part of a purported strategic initiative to insource its sales distribution network. According to Shift4, because the Company is not a member bank as defined in certain payment network rules, the Company is not eligible for primary membership in certain payment networks and is therefore unable to directly access them. Accordingly, Shift4’s payment networks require the Company to be sponsored by a member bank as a service provider, which the Company has accomplished through a sponsorship agreement with its sponsor bank. To cover overdraft obligations at the sponsor bank, prior to December 2022, Shift4 had funds deposited in a sponsor bank merchant settlement account to facilitate gross card transaction deposits for those customers the Company bills on a monthly, as opposed to a daily, basis.
On October 21, 2022, Shift4 disclosed in a filing with the U.S. Securities and Exchange Commission (“SEC”) that the Company’s third quarter 2021, full year 2021, first quarter 2022, and second quarter 2022 financial statements should no longer be relied upon and would need to be restated because of a material weakness in the Company’s financial controls, which had caused it to incorrectly treat customer acquisition costs as cash used in investing activities rather than cash used in operating activities in its consolidated Statements of Cash Flows. As a result, Shift4 was forced to negatively revise its net cash provided by operating activities to $3 million (down from its originally reported $29.2 million), $30.8 million (down from its originally reported $37.1 million), and $70.8 million (down from its originally reported $85 million) for the year ended December 31, 2021, the three months ended March 31, 2022, and the six months ended June 30, 2022, respectively.
On this news, the price of Shift4 shares declined by $1.21 per share, or approximately 2.67%, from $45.37 per share to close at $44.16 on October 24, 2022.
Then, on April 19, 2023, Blue Orca Capital published a report alleging that Shift4 “engaged in a string of highly questionable and hyperaggressive accounting maneuvers seemingly designed to keep the stock afloat” including “cash flow manipulation” and “inexplicable distributor acquisitions that enabled it to capitalize a major component of COGS.” Blue Orca Capital also alleges that Shift4 engaged in unreported related-party transactions and that the Company’s questionable accounting maneuvers “inflated 2022 gross profit by 13%, Adj. EBITDA by 34%, and operating income by close to 3x.”
On this news, the price of Shift4 shares declined by $5.95 per share, or approximately 8.68%, from $68.54 per share to close at $62.59 on April 19, 2023.
Wolf Haldenstein has extensive experience in the prosecution of securities class actions and derivative litigation in state and federal trial and appellate courts across the country. The firm has attorneys in various practice areas; and offices in New York, Chicago and San Diego. The reputation and expertise of this firm in shareholder and other class litigation has been repeatedly recognized by the courts, which have appointed it to major positions in complex securities multi-district and consolidated litigation.
If you wish to discuss this action or have any questions regarding your rights and interests in this case, please immediately contact Wolf Haldenstein by telephone at (800) 575-0735 or via e-mail at firstname.lastname@example.org.
Wolf Haldenstein Adler Freeman & Herz LLP
Patrick Donovan, Esq.
Gregory Stone, Director of Case and Financial Analysis
Tel: (800) 575-0735 or (212) 545-4774
Certification and Authorization Pursuant to Federal Securities Laws
Date of signing: 09/27/2023