San Diego, CA -- (SBWire) -- 08/29/2023 --An investor, who purchased NYSE: FOUR share), filed a lawsuit against Shift4 Payments, Inc. over alleged violations of Federal Securities Laws.
Investors who purchased shares of Shift4 Payments, Inc. (NYSE: FOUR) have certain options and for certain investors are short and strict deadlines running. Deadline: October 19, 2023. NYSE: FOUR investors should contact the Shareholders Foundation at mail@shareholdersfoundation.com or call +1(858) 779 - 1554.
Allentown, PA based Shift4 Payments, Inc. provides software and payment processing solutions in the United States. The Company provides, among other products and services, integrated and mobile point-of-sale ("POS") solutions.
In Shift4 Payments, Inc'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 Payments, Inc, 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 Payments, Inc'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 Payments, Inc 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 Payments, Inc disclosed in a filing with the U.S. Securities and Exchange Commission 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 Payments, Inc 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 April 19, 2023, Blue Orca Capital issued a report outlining its concerns with Shift4 Payments, Inc.. The report alleges that "its CEO faced the threat of a margin call from an unusually large series of stock pledges, creating an existential threat that he would be forced to liquidate up to 10 million shares (12% of diluted shares outstanding)." As a result, Blue Orca alleges that "With the specter of a margin call hanging over the stock, we think that Shift4 engaged in a string of highly questionable and hyper aggressive accounting maneuvers seemingly designed to keep the stock afloat, from cash flow manipulation to inexplicable distributor acquisitions that enabled it to capitalize a major component of COGS."
Shares of Shift4 Payments, Inc. (NYSE: FOUR) declined from $75.90 per share on April 12, 2023, to $57.88 per share on April 19, 2023.
The plaintiff claims that between November 10, 2021 and April 18, 2023, the Defendants made false and/or misleading statements and/or failed to disclose that Shift4 had inadequate disclosure controls and procedures and internal control over financial reporting, that as a result, Shift4 failed to properly account for customer acquisition costs, thereby artificially inflating its net cash provided by operating activities, that accordingly, Shift4 would likely be forced to restate one or more of its previously issued financial statements, that Shift4 employed accounting maneuvers in connection with, among other things, its mass strategic buyout program and sponsor bank merchant settlement account, that were designed to present an inaccurate picture of, inter alia, the Company's performance, its underlying business quality, and its earnings power, that all the foregoing, once revealed, was likely to negatively impact Shift4's reputation and business, and that as a result, the Company's public statements were materially false and misleading at all relevant times.
Those who purchased shares of Shift4 Payments, Inc. (NYSE: FOUR) have certain options and should contact the Shareholders Foundation.
Contact:
Shareholders Foundation, Inc.
Michael Daniels
3111 Camino Del Rio North - Suite 423
92108 San Diego
Phone: +1-(858)-779-1554
Fax: +1-(858)-605-5739
mail@shareholdersfoundation.com
About The Shareholders Foundation
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, , which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigation, and/or settlements are not filed/reached and/or related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.
Shift4 Payments, Inc. (NYSE:FOUR) Investor Notice: Lawsuit Alleges Securities Laws Violations by Shift4 Payments
A lawsuit was filed on behalf of investors in Shift4 Payments, Inc. (NYSE:FOUR) shares over alleged securities laws violations.