BurgerFi International, Inc. (BFI) Misled Investors Regarding its Business Prospects
A shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired BurgerFi International, Inc. (NASDAQ: BFI) common stock between December 17, 2020 and November 15, 2022, for violations of the Securities Exchange Act of 1934. Following the business combination between Opes Acquisition Corp. and Legacy BurgerFi International, the Company, with its subsidiaries, has owned and franchised fast-casual and premium-casual dining restaurants.
According to the complaint, the Company announced it had completed a business combination between Opes Acquisition Corp. and Legacy BurgerFi on December 17, 2020. On November 4, 2021, the Company completed its acquisition of Anthony’s Coal Fired Pizza & Wings and touted the acquisition as “a significant step forward in BurgerFi’s ongoing growth strategy and transition into a premium multibrand platform.”
During the class period, defendants failed to disclose that the Company had overstated the effectiveness of its acquisition and growth strategies and had misrepresented to investors the purported benefits of Anthony’s Acquisition and its post-business combination business and financial prospects.
On August 11, 2022, BurgerFi issued a press release announcing the Company’s second quarter 2022 results, reporting it had missed consensus estimated by $2.28 million. The Company also disclosed that “[n]et loss in the second quarter was $60.4 million compared to a net income of $9.0 million in the year-ago quarter[,]” which “[wa]s primarily the result of goodwill impairment charges of $55.2 million in relation to BurgerFi and Anthony’s coupled with higher depreciation, amortization of intangibles, share-based compensation, interest expense resulting from the acquisition-related debt.” On this news, BurgerFi’s stock price fell $.10 per share, or 3.03%, to close at $3.20 per share on August 11, 2022.
Then, on November 16, 2022, BurgerFi announced its third quarter 2022 results, missing consensus estimates by $0.84 million, explaining that “[f]or the BurgerFi brand, same-store sales decreased 11% and 6% in corporate-owned and franchised locations, respectively.” On this news, BurgerFi’s stock price fell $0.24 per share, or over 10%, to close at $2.03 per share on November 16, 2022.
What Now: Similarly situated shareholders may be eligible to participate in the class action against BurgerFi. Shareholders who want to act as lead plaintiff for the class must file their papers by June 5, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
