BENSALEM, Pa.–(BUSINESS WIRE)–lt;a href=”https://twitter.com/search?q=%24AOS&src=ctag” target=”_blank”gt;$AOSlt;/agt; lt;a href=”https://twitter.com/hashtag/classaction?src=hash” target=”_blank”gt;#classactionlt;/agt;–Law Offices of Howard G. Smith announces that a class action lawsuit has
been filed on behalf of investors who purchased A.O. Smith Corporation
(“A.O. Smith” or the “Company”) (NYSE: AOS)
securities between July 26, 2016 and May 16, 2019, inclusive (the
“Class Period”). A.O. Smith investors have until July 29, 2019 to
file a lead plaintiff motion.
Investors suffering losses on their A.O. Smith investments are
encouraged to contact the Law Offices of Howard G. Smith to discuss
their legal rights in this class action at 888-638-4847 or by email to [email protected].
On May 16, 2019, J Capital Research published a report raising questions
about A.O. Smith’s revenue from China as well as its access to $539
million—or about 84% of the Company’s total cash at year end
2018—sitting in China.
On this news, the Company’s share price fell sharply during intraday
trading, thereby injuring investors.
The complaint filed in this class action alleges that throughout the
Class Period, Defendants made materially false and/or misleading
statements, as well as failed to disclose material adverse facts about
the Company’s business, operations, and prospects. Specifically,
Defendants failed to disclose to investors: (1) that the Company had
undisclosed business connections and entanglements with UTP through
which it funneled up to 75% of its China product sales; (2) that the
Company had used UTP to engage in channel stuffing by artificially
inflating inventories purportedly sold through distributors that were
not based on consumer demand, thereby approximately doubling the normal
level of inventory at such distributors; (3) that the Company had used
its UTP relationship to artificially inflate the sales figures it
reported to investors by as much as 8% and to conceal worsening sales
trends that the Company was experiencing in China; (4) that the
Company’s sales growth had been primarily in lower margin products as
its higher priced products were being undercut by competition in
“second-tier” Chinese cities, causing the Company to experience
significant market pressures; (5) that the Company had increased its
cash reserves in China to over $530 million in furtherance of its
channel stuffing and sales manipulation scheme, encumbering the
Company’s ability to repatriate the cash for use it for capital
expenditures; and (6) as a result, the Company’s public statements were
materially false and misleading at all relevant times.
If you purchased shares of A.O. Smith, have information, would like to
learn more about these claims, or have any questions concerning this
announcement or your rights or interests with respect to these matters,
please contact Howard G. Smith, Esquire, of Law Offices of Howard G.
Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by
telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to [email protected],
or visit our website at www.howardsmithlaw.com.
This press release may be considered Attorney Advertising in some
jurisdictions under the applicable law and ethical rules.
Contacts
Law Offices of Howard G. Smith
Howard G. Smith, Esquire
215-638-4847
888-638-4847
[email protected]
www.howardsmithlaw.com
