GETSWIFT Class Action

Phi Finney McDonald acts for Raffaele Webb, the Representative Applicant, on behalf of Group Members in the class action commenced in the Federal Court of Australia against ASX-listed GetSwift Limited (ASX:GSW) (GetSwift) and its managing director Joel Macdonald. The claim is on behalf of investors who acquired GetSwift securities between 24 February 2017 to 19 January 2018 (inclusive) (claim period) including via the company’s capital raisings in June and December 2017 or by acquiring shares on the ASX during the claim period (Group Members).

The class action is funded by Therium Litigation Finance A IC.

Important events

  1. On 23 May 2018, the Court gave Phi Finney McDonald sole carriage of the class action, and permanently stayed two competing proceedings that had also been issued against GetSwift.
  2. On 7 February 2019, the Court ordered that Group Members who wished to opt out of the proceeding were required to do so by 28 March 2019 – see the February 2019 Notice to Group Members, linked below, for further details.
  3. On 1 October 2019, the Court ordered that Group Members who wished to potentially benefit from any settlement reached at a mediation held in early 2020 were required to register their claims by 22 November 2019. This process is described as “class closure” – see the October 2019 Notice to Group Members, linked below, for further details.
  4. The case did not settle at the mediation held in early 2020. The “class closure” period described in the October 2019 Notice therefore expired, and the proceeding is once again an open class action brought on behalf of all Group Members that have not opted out – see the May 2020 Notice to Group Members, linked below, for further details.
  5. The case is listed to commence trial on 14 September 2020.

Notices to Group Members

  1. February 2019
  2. October 2019
  3. May 2020

Other Important Documents

  1. Amended Originating Application
  2. Further Amended Statement of Claim
  3. Further Amended Defence
  4. Orders of 4 May 2020

Background

GetSwift is a technology company that provides software-as-a-service (SaaS) for managing “last-mile” delivery logistics, routing, dispatching and tracking. The company listed on the ASX on 9 December 2016, following an initial public offering at $0.20 per share. GetSwift’s share price increased rapidly after listing as it announced a series of partnerships/agreements with key enterprise clients, including with the Fruit Box Group, Fantastic Furniture and the Commonwealth Bank of Australia. On 11 December 2017, soon after announcing agreements with Yum! Brands and Amazon, GetSwift announced the completion of a $75 million capital raising at $4.00 per share. GetSwift’s share price at the close of trade on 19 January 2018 was $2.92 and its market capitalisation was about $550 million.

On 20 January 2018, the Australian Financial Review reported that GetSwift had failed to inform the market of the termination of enterprise agreements with the Fruit Box Group and Fantastic Furniture, and had prematurely announced revenue forecasts tied to the partnership with the Commonwealth Bank. The reports also raised doubts about the company’s disclosure practices in respect of other agreements it had announced.

On 22 January 2018, following these reports, GetSwift shares were placed in a trading halt and two days later were suspended from official quotation pending the company’s response to queries from the ASX. Shortly after, GetSwift announced that they had retained PricewaterhouseCoopers to review the company’s compliance with its continuous disclosure obligations.

The ASX reinstated GetSwift shares to official quotation on 19 February 2018. Prior to the opening of trade, GetSwift released a market update stating that more than 50% of the company’s enterprise contracts were still in ‘pre-revenue generation’ phase. By the close of trade on 19 February 2018, GetSwift’s share price had fallen by $1.61 (~55%). On 20 February 2018, GetSwift shares fell a further $0.36 (~27%).

Allegations

The class action alleges that:

  1. during the claim period, GetSwift contravened its continuous disclosure obligations by failing to disclose to the market the termination of material enterprise agreements/partnerships;
  2. during the claim period, GetSwift and Mr Macdonald engaged in misleading or deceptive conduct by omitting material information from announcements to the market about enterprise agreements/partnerships, including that the agreements were subject to free trial periods and could be terminated at any stage;
  3. GetSwift and Mr Macdonald’s conduct caused Getswift’s share price to trade at a price substantially higher than the trading price that would have prevailed in a properly informed market; and
  4. persons who acquired GetSwift’s shares during the claim period have suffered loss and damage by acquiring the shares at an inflated price.

Contact Us

If you would like to find out more from Phi Finney McDonald about the class action, or have any queries, please contact us at classactions@phifinneymcdonald.com.