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After Q2 2022 results release, on a conference call with investors and analysts, Noah Glass, Founder and CEO, disclosed a change in its relationship with Subway that occurred in the second quarter.
Specifically, Glass disclosed that the Company is in the process of losing its business from Subway, that it had lost about 2,500 Subway locations during the second quarter that began directly integrating with marketplaces, and Peter Benevides, CFO, confirmed that fact by stating: “we expect Subway’s direct marketplace integration to continue with the balance (12500) of their locations being removed from our total active location counts in the fourth quarter of this year, or the first quarter of 2023.”
Further during the call, Peter Benevides stated that “When we entered this year, there was an indication that Subway may plan to directly integrate with marketplaces. But at that point in time, the timeline was unclear”. By this statement, he confirmed recognition of respective business developments and risks back to the begging of the year.
But this materially important information and an indication of related risks were not disclosed either during FY 2021 or Q1 2022.
On this news, the price of Olo stock plunged 38% and lost $483 million of its capitalization, seriously damaging investors.
Failure to Disclose,
Breach of Fiduciary duty
Shock Event Date
12 August 2022