SAN DIEGO & BEVERLY HILLS, Calif.--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that purchasers of FAT Brands Inc. (NasdaqCM: FAT) have filed a class action complaint against the company's officers and directors for alleged violations of the Securities Act of 1933 pursuant to FAT's October 23, 2017 initial public offering ("IPO"). FAT, a multi-brand franchising company, acquires, markets, and develops fast casual and casual dining restaurant concepts.
View this information on the law firm's Shareholder Rights Blog: www.robbinsarroyo.com/fat-brands-inc-2
FAT Accused of Misrepresenting Its Financial Figures in Its Offering Documents
According to the complaint, on October 23, 2017, FAT held its IPO, selling 2 million shares of common stock priced at $12 per share, raising $24 million in gross proceeds. FAT officials subsequently emphasized that FAT's asset-light business model allows for growth with minimal capital expenditures through franchising. Despite these representations, FAT's then-present free cash flow was not enough to cover its outsized dividend. In addition, at the time of the IPO, FAT failed to disclose that its sales growth had significantly declined and that the fast-casual dining sector was facing slowdown in growth due to customers fleeing to cheaper, quicker fast-food chains. When the market learned the truth about FAT's business metrics and financial prospects, FAT's stock plummeted, and now trades at less than $8 per share, a 34% decrease from its IPO price.
FAT Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Leonid Kandinov at (800) 350-6003, LKandinov@robbinsarroyo.com, or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested. Sign up for our FREE portfolio monitoring service, Stock Watch.
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