Butterfly Network, Inc. Image
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Butterfly Network, Inc. (formerly Longview Acquisition Corp.)

Class Action
  • Active
Investigation
11/15/2021
Initial Lawsuit
02/16/2022
Lawsuit Progression
04/18/2022

Investigation

Investors investigation into Butterfly Network, Inc. financial disclosures following its merger with Longview Acquisition Corp.

  • Investigation Date
    11/15/2021
  • Hypothetical Affected Period
    February 16, 2021 to November 15, 2021
  • Hypothetical Transgression
    Securities Violation
Main Event

Q3 2021

11/15/2021

SEC Filing

Butterfly Network reports its Q3 2021 financial results, short of “what’s necessary to achieve the annual guidance” (transcript conf. call). The company reported growth but reduced its guided growth year-over-year from 64% to 73% to 30% to 34% ($60 million to $62 million).

“Gross margin is expected to be approximately 28% to 30%. Adjusted gross margin is expected to be approximately 48% to 50%.
Net loss is expected to be approximately $(65) million to $(75) million. Adjusted EBITDA loss is expected to be approximately $(125) million to $(135) million.”

 

The stock impact compares the closing price immediately preceding the date of the event and the following closing price. The price difference also reflects the overall mix of information.

Stock Impact

Close Previous close Price variation Percentage variation
$7.52 $8.6 $-1.08 -12.56%
See more on Factual Timeline

Initial Lawsuit

First Complaint - 02/16/2022

This is a federal securities class action on behalf of a class consisting of:
(a) all persons or entities that purchased or otherwise acquired Butterfly securities between February 16, 2021 and November 15, 2021, both dates inclusive, and/or
(b) all holders of Butterfly common stock as of the record date for the special meeting of shareholders held on February 12, 2021 to consider approval of the merger between Longview and Butterfly and entitled to vote on the merger.

Allegations

According to the complaint, defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the company’s business, operations, and prospects. Specifically, defendants allegedly failed to disclose to investors that:

(i) Butterfly had overstated its post-merger business and financial prospects;
(ii) notwithstanding the ongoing COVID-19 pandemic, Butterfly’s financial projections failed to take into account the pandemic’s broad consequences, which included healthcare logistical challenges, and medical personnel fatigue;
(iii) accordingly, Butterfly’s gross margin levels and revenue projections were less sustainable than the company had represented;
(iv) all the foregoing was reasonably likely to have a material negative impact on Butterfly’s business and financial condition; and
(v) as a result, the company’s public statements were materially false and misleading at all relevant times.

Defendants

  • Company
    Butterfly Network, Inc.
  • Chief Executive Officer
    Todd Fruchterman
  • Chief Financial Officer
    Stephanie Fielding
  • Founder
    Jonathan M. Rothberg
  • Chief Executive Officer
    John Rodin
  • Chief Financial Officer
    Mark Horowitz
  • Director
    Westley Moore
  • Director
    Derek Cribbs
  • Director
    Randy Simpson

Lawsuit progression

  • Docket Number
    2:22-cv-00854
  • Court
    New Jersey District Court

The lead plaintiff deadline has passed, we will update this page as the lawsuit progresses.
Last event retrieved on 09/30/2022.

Factual Timeline

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