The Klein Law Firm announces that a class action complaint has been filed on behalf of shareholders of Casper Sleep Inc. (NYSE: CSPR) who purchased shares between February 7, 2020 and January 1, 3000. The action, which was filed in the United States District Court for the Eastern District of New York, alleges that the Company violated federal securities laws.
In particular, the Casper lawsuit alleges that (1) Casper’s profit margins were actually declining, rather than growing; (2) Casper was changing an important distribution partner, costing it 130 basis points of gross margin in the first quarter of 2020 alone; (3) Casper was holding a glut of old and outdated mattress inventory that it was selling at steeply discounted clearance prices, further impairing the Company’s profitability; (4) Casper was suffering accelerating losses, further placing its ability to achieve positive cash flows and profitability out of reach; (5) 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) as a result of the foregoing, Casper’s ability to achieve profitability, implement its growth initiatives, and expand internationally had been misrepresented in the documents issued in connection with Casper's initial public offering, 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) as a result of the foregoing, Casper’s revenue growth rate was not sustainable and had not positioned the Company to achieve profitability.
Shareholders have until August 18, 2020 to petition the court for lead plaintiff status. Your ability to share in any recovery does not require that you serve as lead plaintiff. You may choose to be an absent class member.
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