BurgerFi (BFI) M&A Misleading Case

• BurgerFi missed estimates for Q2 and Q3 2022 revenue.

• $BFI price fell 10.57%, injuring investors.

• Investors suspect BurgerFi & its Leaders of misleading about the prospects of Anthony’s Acquisition.

On November 16, 2022, BurgerFi (BFI) reported Q3 revenue of $43.3 million, missing consensus estimates by $0.84 million, explaining that “for the BurgerFi brand, same-store sales decreased 11% and 6% in corporate-owned and franchised locations, respectively”.

On this news, the $BFI price fell 10.57%, injuring investors.

Going back to November 4, 2021, BurgerFi completed its acquisition of Anthony’s Coal Fired Pizza & Wings for $156.6 million. Ophir Sternberg, Executive Chairman of the Company, touted Anthony’s Acquisition as “a significant step forward in BurgerFi’s ongoing growth strategy and transition into a premium multi-brand platform.”

Later, on August 11, 2022, BurgerFi reported Q2 revenue of $45.3 million, missing consensus estimates by $2.28 million. The Company also disclosed that “net loss in the second quarter was $60.4 million compared to a net income of $9.0 million in the year-ago quarter” which “was primarily the result of goodwill impairment charges of $55.2 million in relation to BurgerFi and Anthony’s coupled with higher depreciation, amortization of intangibles, share-based compensation, interest expense resulting from the acquisition-related debt”. On this news, the $BFI price fell 3.03%.

Taking all representations and consequent results into account, Investors have reasons to suspect BurgerFi and its Leaders of misleading and financial misrepresentations in connection to Anthony’s Acquisition.