The retail technology firm is not responsible for allegations of inflated performance figures.
Montreal Lightspeed commerce will pay C$11 million without admission of liability to settle a class action lawsuit brought by investors in 2021, a Quebec Superior Court judge ruled Nov. 25.
Lightspeed admits no wrongdoing or liability in the $11 million settlement.
The publicly traded retail technology company was accused of misrepresenting financial statements and key metrics in a 2021 report by a New York investment firm, prompting a class action lawsuit by retail investors Steve Holkman and Tariq Plummer. Lightspeed admits no wrongdoing or liability in the settlement, which was the first proposed in June.
Class members eligible for payment include all individuals and entities that purchased Lightspeed securities between March 7, 2019 and November 3, 2021. Individuals must file a claim for compensation by March 4, 2026.
Founded in 2005, Lightspeed sells point-of-sale and retail software and hardware to restaurants, retailers and hospitality providers.
“While we continue to deny any wrongdoing, we believe it is in the best interests of the company and its stakeholders to resolve this issue at this time,” a Lightspeed spokesperson wrote in a statement to BetaKit today. “This allows us to move forward and fully focus on delivering value to our customers and partners.”
The lawsuit was filed in October 2021 after report from New York-based Spruce Point Capital Management. Spruce Point alleged that the e-commerce company overstated key metrics and did not perform as well as it claimed in the lead-up to its initial public offering (IPO).
CONNECTED: Lightspeed will pay C$11 million and admit no wrongdoing in the proposed settlement of the lawsuit.
Spruce Point, which held a short position in Lightspeed, argued that it had “evidence of poor, inconsistent and constantly changing information” that led the firm to believe that Lightspeed “engaged in a scheme to materially inflate the size, quality and growth prospects of its business.” Spruce Point argued that Lightspeed “significantly inflated” its business before the IPO, including the number of customers and total transaction volume.
Lightspeed said at the time that the report contained “many important inaccuracies and mischaracterizations.” Ahead of the report, Lightspeed's share price peaked at C$160 per share. By the end of 2021, the price had fallen to almost C$50 per share. Today, Lightspeed shares trade at C$16.00 on the Toronto Stock Exchange, with a market capitalization of approximately $2.2 billion.
This year, the Montreal company's revenue reached $1 billion. slightly modernized full-year guidance following strong fiscal second-quarter earnings. Last month, Lightspeed announced it was hiring Contentsquare Chief Revenue Officer Gabriel Benavides as CRO, as its president and former CRO JD Saint-Martin announced he would resign to join a Montreal venture capital firm at the end of March Boreal businesses.
UPDATE (5/12/2025): This story has been updated to include Lightspeed's comment regarding the settlement.
Image courtesy of Lightspeed.
