LOS ANGELES–(BUSINESS WIRE)–$CSPR #classaction—The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Casper Sleep Inc. (“Casper” or the “Company”) (NYSE: CSPR) securities pursuant and/or traceable to the Company’s initial public offering conducted on or around February 7, 2020 (the “IPO”). Casper investors have until August 18, 2020 to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to participate.
In February 2020, the Company completed its initial public offering (“IPO”), in which it sold 8.35 million shares of common stock for $12 per share.
On April 21, 2020, Casper announced that it was decreasing the size of its global operations and sales team, as well as completely winding down its European operations, amounting to a loss of 21% of its workforce. The Company also stated that Gregory Macfarlane had resigned from his positions as Chief Financial Officer and Chief Operating Officer.
On May 12, 2020, the Company announced its first quarter 2020 financial results, reporting a net loss of $34.5 million (a 98% increase year over year) and an adjusted EBITDA loss of $22.9 million (a 60% increase year over year).
Since the IPO, Casper’s share price has traded as low as $6.37 per share, or about 47% below the $12 IPO price.
The complaint alleges that defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose: (1) that Casper’s profit margins were actually declining, rather than growing; (2) that Casper was changing an important distribution partner, costing it 130 basis points of gross margin in the first quarter of 2020 alone; (3) that Casper was holding a glut of old and outdated mattress inventory that it was selling at steeply discounted clearance prices, further impairing the Company’s profitability; (4) that Casper was suffering accelerating losses, further placing its ability to achieve positive cash flows and profitability out of reach; (5) that Casper’s core operations were not profitable, but were causing the Company to suffer over $40 million in negative cash flows during the first quarter of 2020 alone and doubling its quarterly net loss year over year; (6) that as a result of the foregoing, Casper’s ability to achieve profitability, implement its growth initiatives, and expand internationally had been misrepresented in the Offering Documents, as the Company needed to shutter its European operations, halt all international expansion, jettison over one fifth of its global corporate workforce, and significantly curtail new store openings in order to avoid an imminent cash and liquidity crisis, let alone achieve positive operating cash flows; and (7) that as a result of the foregoing, Casper’s revenue growth rate was not sustainable and had not positioned the Company to achieve profitability.
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If you purchased Casper securities during the Class Period, you may move the Court no later than August 18, 2020 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Casper securities, have information or 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 Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to [email protected], or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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