NEW YORK, April 17, 2023 (GLOBE NEWSWIRE) -- Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, reminds investors that class actions have been commenced on behalf of stockholders of Dutch Bros Inc. (NYSE: BROS), Lumen Technologies, Inc. (NYSE: LUMN), Vertex Energy, Inc. (NASDAQ: VTNR), and Fidelity National Information Services, Inc. (NYSE: FIS). Stockholders have until the deadlines below to petition the court to serve as lead plaintiff. Additional information about each case can be found at the link provided.
Dutch Bros Inc. (NYSE: BROS)
Class Period: March 1, 2022 - May 11, 2022
Lead Plaintiff Deadline: May 1, 2023
Dutch Bros operates and franchises drive-thru coffee shops. The Company also sells and distributes coffee and coffee-related products and accessories. The Company claims that as of March 31, 2022, it had 572 shops in operation in 12 U.S. states, of which 310 were companyoperated and 262 were franchised.
On March 1, 2022, two-thirds of the way through the Company’s first quarter of 2022, Dutch Bros held a conference call to discuss its fourth quarter and full year 2021 results. On the call, Defendants made numerous statements reassuring investors that the Company’s first quarter 2022 results would be positive, and in particular that the Company’s margins were healthy. For example, Defendant Jonathan “Joth” Ricci (“Ricci”), the Company’s Chief Executive Officer (“CEO”) stated that, while Dutch Bros is “not immune to margin pressures,” the Company was “managing it appropriately” and that “we are feeling good as we enter ‘22 with the trajectory of our margins, given everything going on.” Defendant Charles L. Jemley (“Jemley”), the Company’s Chief Financial Officer (“CFO”) similarly stated “we’re just not feeling compression in margins.”
However, on May 11, 2022, after the market closed, the Company issued a press release announcing poor financial results for the first quarter of 2022. Therein, the Company reported a net loss of $16.3 million, compared to a net loss of $4.8 million for the first quarter of 2021. The Company also reported an adjusted net loss of $2.5 million (a loss of $0.02 per share), which fell below the Street’s estimated earnings of $0.01 per share.
The same day, the Company held a conference call to discuss the Company’s first quarter 2022 results. To explain the Company’s poor performance, Defendant Ricci pointed to Dutch Bros’ margins, stating:
[M]argin pressure on our company shops led to a lower adjusted EBITDA result than we expected. That margin pressure was primarily a result of these factors: our decision to be disciplined on the price we took, which we believe is less than half as much as many of our peers; faster inflation and cost of goods, especially in dairy; the pull forward of deferred expenses related to the maintenance of shops; and normal new store inefficiency amplified by the volume of new and ramping units in quarter 1.
Defendant Ricci further explained: “we did not perceive the speed and magnitude of cost escalation within the quarter. Dairy, for example, which makes up 28% of our commodity basket, rose almost 25% in Q1.”
On this news, Dutch Bros’ share price fell $9.26, or 26.9%, to close at $25.11 per share on May 12, 2022, thereby injuring investors.
During the Class Period, Defendants made materially false and/or misleading statements, and failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that the Company was experiencing increased costs and expenses, including on dairy; (2) that, as a result, the Company was experiencing increased margin pressure and decreased profitability in the first quarter of 2022; and (3) that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
For more information on the Dutch Bros class action go to: https://bespc.com/cases/BROS
Lumen Technologies, Inc. (NYSE: LUMN)
Class Period: September 14, 2020 - February 7, 2023
Lead Plaintiff Deadline: May 2, 2023
At the outset of the Class Period, Lumen announced it would redefine its business by renaming itself from CenturyLink to Lumen and refining its marketing approach, cutting off market segments and operations that did not align with the Company’s strategic objectives and adding market segments that were aligned with the Company’s vision.
Specifically, Lumen announced to investors that it would leverage its existing 400,000 route miles of fiber optic cable, which had previously serviced enterprise and wholesale markets, to expand its fiber services to small and medium business (“SMB”) and residential or consumer markets. Lumen represented to investors that expanding its fiber services into the SMB and residential markets, branded as Quantum Fiber, was a natural fit for the Company that represented a strong opportunity for growth.
Throughout the Class Period, Defendants represented to investors and the public that Lumen was, among other things, “investing heavily in our consumer fiber business” and “aggressively taking market share in our small business segment.” Defendants also represented that “we continue expanding our Quantum Fiber footprint and increasing our penetration” and “we're not capital-constrained. So as we continue to improve our penetration and performance, we'll continue to expand our footprint, and we believe we've got a long runway for growth in -- within Lumen in Quantum Fiber.”
However, contrary to Defendants’ statements touting the rate of investment and progress in expanding fiber services to SMB and residential markets, Lumen was experiencing serious headwinds that were impeding its ability to grow its newly-targeted fiber markets.
Beginning on February 9, 2022, Defendants began to admit that Lumen’s expansion into SMB and residential fiber services was occurring slower than previously represented. On this news, Lumen’s stock price declined $1.99, from a close of $12.82 per share on February 9, 2022, to a close of $10.83 on February 10, 2022.
On November 2, 2022, Defendants continued to partially disclose the truth when Lumen’s Chief Executive Officer admitted, “let me be clear, we are not yet at the pace of build we expect or want” with respect to the Company’s development of its Quantum Fiber brand. On this news, Lumen’s stock price declined $1.25, from a close of $7.05 per share on November 2, 2022, to a close of $5.80 on November 3, 2022.
By February 7, 2023, Defendants would admit, contrary to what was previously represented, that they had pressed “more of a stop button than a pause button” on Lumen’s investment into the Quantum Fiber network and expansion into the SMB and residential markets while the Company re-evaluated its strategic priorities. The price of Lumen’s common stock had been artificially inflated by Defendants’ misrepresentations about the Company’s progress expanding into SMB and residential markets. Upon the news that Lumen’s progress was slower than represented and that Lumen had stopped investing in the expansion of its Quantum Fiber network, the price of Lumen’s common stock plummeted as the artificial inflation was removed from the price. On this news, Lumen’s stock price declined $1.04, from a close of $4.99 per share on February 7, 2023, to a close of $3.95 on February 8, 2023.
For more information on the Lumen class action go to: https://bespc.com/cases/LUMN
Vertex Energy, Inc. (NASDAQ: VTNR)
Class Period: April 1, 2022 - August 8, 2022
Lead Plaintiff Deadline: June 12, 2023
Vertex Energy is an energy company focused on the production and distribution of conventional and alternative fuels. In early 2021, Vertex Energy announced that it had reached an agreement to acquire an oil refinery located in Mobile, Alabama and a key component of the acquisition was Vertex Energy’s plan to convert a portion of the refinery’s 91,000 barrel-per-day output to renewable diesel fuel, which was expected to generate higher profits than the refinery’s conventional gasoline and diesel fuel outputs.
But as the Vertex Energy class action lawsuit alleges, unbeknownst to investors, immediately prior to the closing of the Mobile acquisition, defendants had entered into, or were a party to, a series of transactions that dramatically capped the new plant’s profitability and would, in fact, lead to significant losses immediately following the acquisition. These transactions, which in some instances were required pursuant to the financing arrangements Vertex Energy had entered into, resulted in over $125 million in losses during the Class Period.
On August 9, 2022, Vertex Energy disclosed a net loss of $63.8 million during the second quarter of 2022. Vertex Energy also revealed that adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for the Mobile refinery, even after adjusting for certain incurred losses, was only $63.6 million, compared to the guidance given just three months prior for EBITDA of $120-$130 million in the second quarter, a total shortfall of 50%. Vertex Energy also withdrew its financial guidance for the remainder of fiscal year 2022 and fiscal year 2023. On this news, the price of Vertex Energy common stock fell by approximately 44%, damaging investors. The stock price continued to fall in subsequent days as the market digested the news, reaching a low of just $7.05 per share on August 11, 2022, roughly 50% below the closing price on August 8, 2022.
For more information on the Vertex Energy class action go to: https://bespc.com/cases/VTNR
Fidelity National Information Services, Inc. (NYSE: FIS)
Class Period: February 9, 2021 - February 10, 2023
Lead Plaintiff Deadline: May 5, 2023
Fidelity National provides global e-commerce and payment technologies to financial institutions and businesses and, in recent years, has become the largest processing and payments company in the world. The Company is most known for its development of Financial Technology, or FinTech, and offers its solutions in three primary segments: Merchant Solutions; Banking Solutions; and Capital Market Solutions. The Merchant Solutions segment accounted for approximately 30% of the Company’s total revenue in 2021, and serves merchants by enabling them to accept, authorize, and settle electronic payment transactions.
Throughout its history, Fidelity National has acquired several other financial technology firms. Relevant to the allegations here, on July 31, 2019, Fidelity National announced it had closed the acquisition of payments company Worldpay, Inc. (“Worldpay”) for $43 billion, consisting of $35 billion in cash and the assumption of $8 billion in debt. As a result of the acquisition, the Worldpay business became part of the Merchant Solutions segment.
During the Class Period, Defendants made false and/or misleading statements about Fidelity National’s latest acquisition of Worldpay by assuring investors it had “successfully completed the Worldpay integration” and touting the benefits of the Worldpay integration for the Company. As a result, Defendants’ positive statements about the Company’s business, operations, and prospects during the Class Period were materially false and /or misleading.
Investors slowly learned that the Company’s important Merchant Solutions segment was underperforming and that the Company’s integration of Worldpay was not “successfully completed.”
First, on August 4, 2022, Fidelity National announced that its Chief Financial Officer (“CFO”), James Woodall, planned to “step down” as Corporate Executive Vice President and CFO effective November 4, 2022. On this news, the price of Fidelity National stock fell more than 7%, from a closing price of $104.13 per share on August 3, 2022 to a closing price of $96.57 per share on August 4, 2022.
Other management changes soon followed. On October 18, 2022, the Company announced that Stephanie Ferris, who was appointed President of the Company in February and had served as the CFO of Worldpay, would become the new Chief Executive Officer (“CEO”) effective January 1, 2023. The Company also announced that that the outgoing CEO, Gary Norcross, who had been with the Company since 1988 and in the CEO role since 2015, would become Executive Chairman of the Board of Directors upon the transition.
Then, on November 3, 2022, Fidelity National reported that its Merchant Solutions segment – namely Worldpay – suffered a “margin contraction of 430 basis points.” In response to this news, the price of Fidelity National stock declined more than 29%, from a closing price of $79.47 per share on November 2, 2022, to a closing price of $57.18 per share on November 3, 2022. Analysts reported the new Fidelity National management “recognize[d] the need to rebuild investor confidence.”
Finally, before markets opened on February 13, 2023, Fidelity National announced it would spin off Worldpay, and in the process, the Company recognized a stunning $17.6 billion write-down on the asset. In response to this revelation, the price of Fidelity National stock fell more than 12%, from a closing price of $75.43 per share on the prior trading day of February 10, 2023, to a closing price of $66.00 per share on February 13, 2023.
As a result of Defendants’ wrongful acts and misleading statements, and the precipitous decline in the market value of the Company’s securities, Plaintiff and other Class members have suffered significant losses and damages.
For more information on the Fidelity National class action go to: https://bespc.com/cases/FIS
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Melissa Fortunato, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
