Fidelity National provides global e-commerce and payment technologies to financial institutions and businesses and, in recent years, has become the largest processing and payments company in the world. The Company’s Merchant Solutions segment, which accounted for approximately 30% of Fidelity National’s total revenue in 2021, serves merchants by enabling them to accept, authorize, and settle electronic payment transactions.
On July 31, 2019, Fidelity National announced it had completed the acquisition of payments company Worldpay, Inc. (“Worldpay”) for $43 billion, which became part of the Fidelity National Merchant Solutions business. Throughout the Class Period, Defendants assured investors that the integration of Worldpay was “ahead of schedule,” achieved “success in revenue synergies,” and ultimately was “successfully completed.”
The Class Action alleges that, during the Class Period, Defendants misled investors and/or failed to disclose that (1) the integration of Worldpay was not ahead of schedule; (2) the integration of Worldpay was not successfully completed during the Class Period; (3) the increases in revenue synergies were not driven by the Worldpay integration; and (4) as a result, Defendants’ positive statements about the Company’s financial guidance, business, operations, and prospects were materially false and misleading and/or lacked a reasonable basis at all relevant times.
The truth began to emerge on August 4, 2022, when Fidelity National announced that its Chief Financial Officer James Woodall planned to “step down.” In response to this news, shares of Fidelity National declined approximately 7%, from a closing price of $104.13 per share on August 3, 2022, to a closing price of $96.57 per share on August 4, 2022.
Then, on November 3, 2022, the Company announced disappointing results for the third quarter of 2022, including that profit margins in the Merchant Solutions business “saw continued pressure in the quarter” resulting “in an overall adjusted EBITDA margin contracting 150 points year-on-year.” In response to this news, shares of Fidelity National declined approximately 28%, from a closing price of $79.47 per share on November 2, 2022, to a closing price of $57.18 per share on November 3, 2022.
Finally, on February 13, 2023, Fidelity National announced that it would be spinning off Worldpay and recording a goodwill impairment charge of $17.6 billion related to its Merchants Solutions business. In response to this news, shares of Fidelity National declined approximately 12%, from a closing price of $75.43 per share on the prior trading day of February 10, 2023, to a closing price of $66.00 per share on February 13, 2023.