Shift4 Payments, Inc. (NYSE: FOUR) Securities Fraud Class Action

Shift4 investors may receive additional information about the case by clicking the link "Submit Your Information" above.  If you are a member of the class described below, you may no later than October 19, 2023 move the Court to serve as lead plaintiff of the class, if you so choose.

A class action lawsuit has been filed on behalf of those who purchased or acquired Shift4 Payments, Inc. (“Shift4”) (NYSE: FOUR) securities between November 10, 2021 and April 18, 2023, both dates inclusive (the “Class Period”). 

Case Background:
The Class Period begins on November 10, 2021, when Shift4 issued a shareholder letter before markets opened, announcing the company’s Q3 2021 financial results. In the shareholder letter, the company recorded $19.3 million of customer acquisition costs in the investing activities section of its unaudited Condensed Consolidated Statements of Cash Flows, as well as $25.6 million in net cash provided by operating activities, for the nine months ended September 30, 2021.

On October 21, 2022, Shift4 disclosed in an SEC filing that certain of its 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 in certain past financial statements. 

On this news, Shift4’s stock price fell $1.21 per share, or 2.67%, to close at $44.16 per share on October 24, 2022.

Then, on April 19, 2023, market analyst 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.” The report also indicated 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.”

Following this news, Shift4’s stock price fell $5.95 per share, or 8.68%, to close at $62.59 per share on April 19, 2023. 

The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the company’s business, operations, and compliance policies.  Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) Shift4 had inadequate disclosure controls and procedures and internal control over financial reporting; (2) as a result, Shift4 failed to properly account for customer acquisition costs, thereby artificially inflating its net cash provided by operating activities; (3) accordingly, Shift4 would likely be forced to restate one or more of its previously issued financial statements; (4) 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; (5) all the foregoing, once revealed, was likely to negatively impact Shift4’s reputation and business; and (6) as a result, the company’s public statements were materially false and misleading at all relevant times. 

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.

If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Kessler Topaz Meltzer & Check, LLP:  Jonathan Naji, Esq. (484) 270-1453 or via e-mail at info@ktmc.com.  If you would like additional information about the suit, please click on the link "Submit Your Information" above and fill out the form as promptly as possible.