SAN DIEGO, April 25, 2023 (GLOBE NEWSWIRE) -- Robbins LLP is investigating the officers and directors of Olo Inc. (NYSE: OLO) to evaluate whether they breached fiduciary duties to Olo and its shareholders. Olo provides software-as-a-service platform for multi-location restaurants in the United States.
If you would like more information about our investigation into Olo Inc.'s misconduct, click here.
What is this Case About: Olo Inc. (OLO) Failed to Disclose Key Metrics Regarding its Relationship with Subway to Shareholders
According to a securities fraud class action lawsuit filed against the Company, 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. 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.
On April 10, 2023, the Court denied defendants' motion to dismiss the complaint, paving the way for litigation to proceed.
Contact us to learn more:
Aaron Dumas
(800) 350-6003
adumas@robbinsllp.com
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About Robbins LLP: 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. To be notified if a class action against Olo Inc. settles or to receive free alerts when corporate executives engage in wrongdoing, sign up for Stock Watch today.
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