SAN DIEGO, Dec. 05, 2023 (GLOBE NEWSWIRE) — Robbins LLP informs investors that on December 1, 2023, Judge Rakoff denied in part defendants’ motion to dismiss the complaint filed against Olo Inc. (NYSE: OLO) on behalf of stockholders for violations of the Securities Exchange Act of 1934. Judge Rakoff’s ruling allows certain claims against Olo to proceed. Class actions of this nature can harm the Company by depleting its corporate assets.
For more information, submit a form, email Aaron Dumas, Jr., or give us a call at (800) 350-6003.
What is this Case About: Olo Inc. (OLO) Failed to Disclose Key Metrics Regarding its Relationship with Subway to Shareholders
According to the complaint, on February 12, 2020, Olo announced a partnership with Subway® restaurants (“Subway”) to enable Subway’s more than 20,000 U.S.-based restaurants to handle digital orders from third-party “marketplaces” such as Uber Eats or DoorDash.
On August 10, 2021, Olo reported that it ended the second quarter of 2021 with approximately 74,000 active locations, which represented a 30% increase over the same period in the prior year. The Company’s reported active locations included approximately 15,000 Subway locations, which eventually represented approximately 20% of the Company’s reported active locations. As Olo reported increasing active locations, its stock price soared to trade above $45 per share.
However, during the class period, defendants misled investors as to the Company’s success by citing active locations figures that included Subway locations that would imminently cease using the Company’s services and by failing to disclose that Subway would be ending its relationship with Olo. After markets closed on August 11, 2022, Olo reported its results for the second quarter of 2022 and reduced its guidance for full-year 2022. Olo also revealed that 2,500 Subway locations had begun to directly integrate with third-party marketplaces and that the remaining 15,000 Subway locations would be removed from the Company’s active locations count in the fourth quarter of 2022 and the first quarter of 2023. In a stunning admission, the Company acknowledged that the previously undisclosed Subway exodus had been known internally throughout the class period. Indeed, Chief Financial Officer Peter J. Benevides instructed analysts that “when we entered the year, there was an indication that Subway may plan to directly integrate with marketplaces” and admitted that Olo took the undisclosed pending Subway departure into account when providing guidance for the year. On this news, the price of Olo stock fell approximately 36%, to close at $8.26 per share on August 12, 2022, erasing more than $480 million in shareholder value.
What Now: If you own Olo Inc. stock, you may be eligible to assist the Company in protecting its assets and implementing valuable corporate governance reforms.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.
About Robbins LLP: Some law firms issuing releases about this matter do not actually litigate securities class actions; Robbins LLP does. A recognized leader in shareholder rights litigation, the attorneys and staff of Robbins LLP have been dedicated to helping shareholders recover losses, improve corporate governance structures, and hold company executives accountable for their wrongdoing since 2002. Since our inception, we have obtained over $1 billion for shareholders.
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| Contact: Aaron Dumas, Jr. Robbins LLP 5060 Shoreham Place, Ste. 300 San Diego, CA 92122 adumas@robbinsllp.com (800) 350-6003 www.robbinsllp.com | https://www.facebook.com/RobbinsLLP/ https://www.linkedin.com/company/robbins-llp/ |
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