What Went Wrong With Lightspeed’s Growth Story — and How Investors Could Still Win

Case: 500-06-001164-215

Lightspeed Commerce ($NYSE-LSPD) has agreed to a CAD $11 million settlement to resolve claims that it misled investors about its growth metrics, customer base, and competitive position in the e-commerce and point-of-sale software market.

The agreement, which has been submitted to the court for final approval, offers shareholders a chance to recover losses tied to the company’s steep stock decline.

How Leadership Lapses Fueled the Crisis

In 2021, Lightspeed presented itself as a rising force in cloud-based commerce solutions. Executives promoted rapid revenue growth, an expanding merchant base, and strong market share gains, emphasizing momentum and dominance in the small-to-midsize business segment.

But, soon, a short-seller alleged that Lightspeed had inflated key business metrics and downplayed competitive pressures, sparking immediate doubts about the company’s true position.

The report went further, suggesting Lightspeed exaggerated revenue per customer and retention rates. As one analyst noted at the time: “The gap between the story Lightspeed is telling and the numbers they’re delivering is too big to ignore.”

Investors Call Out the Growth Narrative

Over the following months, through November 2021 and into early 2022, earnings updates reinforced investor skepticism and fueled further losses.

By 2022, investors had filed a lawsuit, alleging that Lightspeed’s public disclosures failed to reflect its true financial health and competitive risks. They argued that the company’s upbeat statements had artificially inflated its stock price, leaving them exposed when reality caught up.

A Deal to Compensate Shareholders

Lightspeed has now agreed to a CAD $11 million settlement to resolve these claims. While the company denies any wrongdoing, the settlement represents a clear path for investors to recover part of their losses. The agreement has been submitted to the court for final approval, and investors can already submit their claims to get payment.

If you purchased LSPD, you can check the details and file a claim here.