Longview was a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combination with one or more businesses. Butterfly, a digital health company, develops, manufactures, and commercializes ultrasound imaging solutions in the United States and internationally. The Company offers Butterfly iQ, a handheld and single-probe whole body ultrasound system; and Butterfly iQ+, a point-of-care ultrasound imaging device that connects with a smart phone or tablet. Between late 2019 and early 2020, a novel strain of the coronavirus disease, commonly referred to as COVID-19, became an ongoing global pandemic, with the outbreak first identified in Wuhan, China, in December 2019. The virus quickly spread to other countries, including the U.S., prompting state, federal, and private parties to enact various health and safety measures to halt the spread of the disease, which has since claimed millions of lives. On November 20, 2020, almost one year into the ongoing COVID-19 pandemic, Butterfly issued a press release announcing that it had entered into a merger agreement with Longview. On the basis of the defective Proxy, on February 12, 2021, Longview shareholders voted to approve the Merger at a special shareholder meeting. Following the consummation of the Merger on February 16, 2021, Longview changed its name to “Butterfly Network, Inc.” and Butterfly stock began trading on the New York Stock Exchange. The complaint alleges that, The Proxy was negligently prepared and, as a result, contained untrue statements of material fact or omitted to state other facts necessary to make the statements made not misleading and were not prepared in accordance with the rules and regulations governing its preparation. Additionally, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and compliance policies. Specifically, the Proxy and Defendants made false and/or misleading statements and/or failed to disclose 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. On November 15, 2021, Butterfly announced its financial results for the third quarter of 2021. In a press release, Butterfly advised, among other things, that the Company’s total gross margin for the quarter was negative 35% and that the Company expected its revenue for 2021 to be $60 million to $62 million this year, significantly below the guidance it gave out in Q1 of $76 million to $80 million. That same day, on an earnings call with investors and analysts to discuss the Company’s financial results for the third quarter, Butterfly’s CEO, Todd Fruchterman, stated that the Company’s results were impacted by “healthcare logistical challenges, and doctor, nurse, and medical technician fatigue concurrent with COVID conditions and it’s broad consequences.” On this news, Butterfly’s stock price fell $1.08 per share, or 12.55%, to close at $7.52 per share on November 15, 2021. Subsequent to, and due to, the closing of the Merger, the price of Butterfly common stock declined precipitously as the truth about Butterfly and the Proxys false and misleading nature were revealed over time.
Notes:
The alleged class includes : All persons or entities that purchased or otherwise acquired Butterfly securities between February 16, 2021 and November 15, 2021, both dates inclusive.
For More information as well as to join this case please contact Atara Twersky, Esq. at atara@twerskylawgroup.com or atwersky@aftlaw.com. Atara is Principal at Twersky Law Group and Of counsel at AF&T law firm where she is director of Investor Services. Atara focuses her practice on assisting her clients with increasing their investment portfolio recoveries and ensuring that their portfolios remain healthy and robust. For more information on shareholder recoveries click here and to listen to Atara’s podcast with notable guests in the Pension fund Industry listen to Pension and Investments Podcast, on all matters related to your investment portfolio and more. For more information on Atara and her legal work connected to shareholder protection click here.
