Farfetch accused of “misleading” investors

The former Portuguese unicorn Farfetch, which specialises in selling both new and second-hand luxury goods on a dedicated platform, has been accused in the US of providing “misleading information” to its investors about the state of the business.

In a collective lawsuit, the company stands accused of making “misleading statements” that have harmed investors.
Despite losing half of its listed value on Wall Street (It is now worth just over €400 million from the €1Bn it had been worth a few years back), as well as the company’s accumulated losses, it has nevertheless got a new investor: Steven Cohen, the owner of the baseball team New York Mets.
The company has been in the news in recent days for all the wrong reasons after it postponed the presentation of its results, which are expected to show an overall loss because of squeezed margins over costs despite a higher sales turnover.
Faced with mounting pressure, the company’s founder José Neves is evaluating the possibility of taking Farfetch off the New York Stock Exchange with the support of JPMorgan and Evercore.
Farfetch shares are currently trading at US$ 1.18. When the company floated on the NYSE shares were trading at US$ 20 and hit a maximum of US$ 73 in February, 2021.