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Farfetch Limited Class Action Lawsuit

29 days left to seek lead plaintiff status

Case Summary

Company Name
Farfetch Limited
Stock Symbol
FTCH
Class Period
September 21, 2018 and August 8, 2019, including purchasers of securities pursuant to the September 21, 2018 initial public offering
Motion Deadline
November 16, 2019
Court
Southern District of New York

On September 17, 2019, the Farfetch Limited class action lawsuit was commenced charging Farfetch, certain of its officers and directors, and the underwriters of its September 21, 2018 initial public offering (“IPO”) with violations of the Securities Act of 1933. This class action lawsuit was filed in the Southern District of New York and is captioned Omdahl v. Farfetch Limited, No. 1:19-cv-08657.  A second class action lawsuit against Farfetch was filed in the Southern District of New York alleging violations of the Securities Exchange Act of 1934 on behalf of purchasers of Farfetch Class A ordinary shares between September 21, 2018 and August 8, 2019 (the “Class Period”).

Farfetch, through its subsidiary, Farfetch.com Limited, provides an online marketplace for luxury goods in the Americas, Europe, Middle East, Africa, and Asia Pacific.  Farfetch generates income primarily from handling transactions that take place on its main online platform, Farfetch Marketplace, which represents 90% of Farfetch’s revenues.  Farfetch measures its transactions in gross merchandise value (“GMV”).

On September 19, 2018, Farfetch filed with the U.S. Securities and Exchange Commission (“SEC”) its final amendment to the Registration Statement for the IPO, which was declared effective on September 20, 2018.  On September 24, 2018, Farfetch filed with the SEC its final Prospectus for the IPO, registering more than 44.2 million shares of Class A ordinary shares (33.6 million shares offered by Farfetch and more than 10.6 million shares offered by certain selling shareholders) at a price of $20 per share.  Farfetch received net proceeds of approximately $750.5 million from the IPO.

The Farfetch class action lawsuit alleges that in the Registration Statement and throughout the Class Period, defendants made false and misleading statements and/or failed to disclose material adverse information about Farfetch’s operations and prospects.  Specifically, defendants failed to disclose that Farfetch’s core online wholesale business was highly susceptible to underpricing by competitors and that its growth rates were foreseeably unsustainable.  As a result of defendants’ false statements and/or omissions, Farfetch Class A ordinary shares traded at artificially inflated prices of more than $30 per share during the Class Period. 

On August 8, 2019, after the market closed, Farfetch announced its second quarter 2019 financial results, reporting a loss of $89.6 million after taxes, compared to a loss of $17.7 million in the prior year period.  Additionally, after previously predicting that its platform GMV metric would grow 41% year over year, Farfetch announced that it now expected only 30% to 35% year-over-year platform GMV growth for the third quarter of 2019, and only 37% to 40% year-over-year platform GMV growth for fiscal 2019.  Additionally, Farfetch announced that Chief Operating Officer, Andrew Robb, would be stepping down from his position after a six-month transitional period.  During Farfetch’s second quarter 2019 earnings call with investors and analysts, Farfetch blamed the disappointing results on competitive pressures from increased promotional pricing and discounting of luxury goods by competitors, despite previously touting “barriers to entry” and Farfetch’s allegedly “superior” platform.  Following this news, the price of Farfetch Class A ordinary shares declined $8.12 per share, or more than 44%, to close at $10.13 per share on August 9, 2019.

The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Farfetch Class A ordinary shares during the Class Period, including purchasers of securities pursuant to the IPO, to seek appointment as lead plaintiff in the Farfetch class action lawsuit.  A lead plaintiff will act on behalf of all other class members in directing the Farfetch class action lawsuit.  The lead plaintiff can select a law firm of its choice to litigate the Farfetch class action lawsuit.  An investor’s ability to share in any potential future recovery of the Farfetch class action lawsuit is not dependent upon serving as lead plaintiff.  If you wish to serve as lead plaintiff of the Farfetch class action lawsuit or have questions concerning your rights regarding the Farfetch class action lawsuit, please provide your information here or contact counsel, Brian E. Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at bcochran@rgrdlaw.com.  Lead plaintiff motions for the Farfetch class action lawsuit must be filed with the court no later than November 16, 2019.

Robbins Geller Rudman & Dowd LLP is one of the world’s leading law firms representing investors in securities class action litigation.  With 200 lawyers in 9 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history.  For six consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in the world in both amount recovered for shareholders and total number of class action settlements.  Robbins Geller attorneys have helped shape the securities laws and have recovered tens of billions of dollars on behalf of aggrieved victims.  Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide.  Robbins Geller attorneys are consistently recognized by courts, professional organizations and the media as leading lawyers in the industry.

Class Period: September 21, 2018 and August 8, 2019, including purchasers of securities pursuant to the September 21, 2018 initial public offering -
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