Wix faces securities fraud probe after 27% stock drop on AI woes

Bleichmar Fonti & Auld LLP is investigating Wix.com Ltd. for securities fraud after the stock plunged 27% on May 13.

"Wix acknowledged that its professional developer customers were using competing AI tools and that its new Wix Harmony platform had 'holes' and 'missing capabilities,'" the law firm said in a statement.

The stock fell $20.56 to close at $55.32 on May 13 after Wix reported first-quarter earnings and revenue below consensus expectations. The company attributed the miss to softness in its professional developer business, saying it had fallen behind "the workflow and the needs of" professional developers and had delayed product updates.

The investigation centers on whether Wix made false or misleading statements about demand from professional designers, AI competition, and its ability to sustain growth through new products. Wix has recently focused on AI tools including its Wix Harmony website builder and the acquisition of AI platform Base44.

The probe adds legal overhang for Wix as it faces intensifying competition in AI-powered web development. Investors who purchased Wix shares may have legal options, with BFA Law offering contingency fee representation. The next catalyst for the stock will be any regulatory findings or the company's second-quarter earnings report.

This article is for informational purposes only and does not constitute investment advice.