Montréal-based Lightspeed Commerce will pay $11 million CAD with no admission of liability to settle a class-action lawsuit brought by investors in 2021, a Québec Superior Court judge ruled on Nov. 25.
Lightspeed will admit no wrongdoing or liability as part of the $11-million settlement.
The publicly listed retail technology company was accused of misrepresenting financial reports and key metrics in a report by a New York investment firm in 2021, prompting a class-action lawsuit by retail investors Steve Holcman and Tarique Plummer. Lightspeed will admit no wrongdoing or liability as part of the settlement, which was first proposed in June.
The members of the class-action suit eligible for a payout are all individuals and entities who bought Lightspeed securities between March 7, 2019 and Nov. 3, 2021. Individuals must submit a compensation claim before March 4, 2026.
Founded in 2005, Lightspeed sells point-of-sale and commerce software and hardware to restaurants, retailers, and hospitality providers.
“While we continue to deny any wrongdoing, we believe that resolving this issue at this stage is in the best interest of the company and its stakeholders,” a Lightspeed spokesperson wrote in a statement to BetaKit today. “This allows us to move forward and focus fully on delivering value to our customers and partners.”
The lawsuit was filed in October 2021 following a report from New York-based short seller Spruce Point Capital Management. Spruce Point alleged the e-commerce company had inflated key metrics and wasn’t performing as well as it claimed in the lead-up to its initial public offering (IPO).
RELATED: Lightspeed would pay $11 million CAD and admit no wrongdoing in proposed lawsuit settlement
Spruce Point, which held a short position on Lightspeed, alleged that it had “evidence of poor, inconsistent, and continually changing disclosures,” leading the firm to believe that Lightspeed had “engaged in a pattern of materially inflating the size, quality, and growth prospects of its business.” Spruce Point alleged that Lightspeed had “massively inflated” its pre-IPO business, including its customer count and gross transaction volume.
Lightspeed said at the time that the report contained “numerous important inaccuracies and mischaracterizations.” Before the report, Lightspeed’s stock price had reached a high of $160 CAD per share. It plunged to nearly $50 CAD per share by the end of 2021. Today, Lightspeed trades at $16 CAD on the Toronto Stock Exchange, with a market cap of roughly $2.2 billion.
The Montréal company reached $1 billion in revenue this year and slightly upgraded its yearly outlook following strong fiscal Q2 earnings. Last month, Lightspeed announced it was hiring Contentsquare chief revenue officer Gabriel Benavides to fill the CRO role, as its president and former CRO JD Saint-Martin announced he would step down at the end of March to join Montréal venture firm Boreal Ventures.
UPDATE (05/12/2025): This story has been updated to include comment from Lightspeed on the settlement.
Feature image courtesy Lightspeed.