RADNOR, Pa., Oct. 14, 2019 (GLOBE NEWSWIRE) — The law firm of Kessler Topaz Meltzer & Check, LLP announces that a securities fraud class action lawsuit has been filed in the United States District Court for the District of Utah against Overstock.com, Inc. (Nasdaq: OSTK) (“Overstock”) on behalf of those who purchased or otherwise acquired Overstock securities between between May 9, 2019 and September 23, 2019, inclusive (the “Class Period”).
Important Deadline: Investors who purchased or otherwise acquired Overstock securities during the Class Period may, no later than November 26, 2019, seek to be appointed as a lead plaintiff representative of the class. For additional information or to learn how to participate in this litigation please click here.
According to the complaint, Overstock is an online retailer of furniture, home décor and other products that recently shifted its focus to include the development and commercialization of the financial applications of blockchain cryptocurrency technologies through its tZERO platform.
The Class Period commences on May 9, 2019, when the defendants published a release announcing purported results for the first quarter of 2019. The release announced that, after spending $100 million of shareholder funds over the last four years, Overstock’s tZERO product was ready to launch, and critically, that Overstock Retail department was performing so well that EBITDA guidance could be increased by 50%. As defendants explained in the release, the return of Overstock Retail to positive cash flow was imperative in supporting the launch of tZERO.
According to the complaint, on Sunday, September 22, 2019, MarketWatch published a report titled, “Overstock founder tried to squeeze short sellers, then sold out when the SEC cracked down.” The report stated, in part, “One of Patrick Byrne’s last acts at Overstock.com Inc. appears to have forced a short squeeze that warranted the attention of the Securities and Exchange Commission, and the sell-off of his entire stake over the last three days is now raising questions about whether he tried to manipulate the market.” The report also noted the implications of the unusual timing and amount of defendant Byrne’s stock sales. The report concluded, “[e]ven if Byrne escapes charges of market manipulation or insider trading, this is still a horrible look: Amid an ongoing investigation by the SEC’s enforcement division into Overstock’s tZERO platform and its token offering, the chief executive quit and sold his entire stake while seemingly hiding out in an unidentified Asian country, with plans to invest the money in ways that it may not be recoverable by U.S. authorities.”
On September 23, 2019, Overstock belatedly reported that its Chief Financial Officer, defendant Gregory Iverson, had left Overstock in an unscheduled departure a week before, on September 17, 2019, and that Overstock would lower guidance to break even EBITDA for the year, eliminating the projected $17.5 million that Overstock had only recently guided to expect. Following this news, the price of Overstock shares fell from just below $15.00 per share on September 20, 2019, the trading day prior to September 23, 2019, to $11.19 per share.
The complaint alleges that, throughout the Class Period, the defendants made false and/or misleading statements and/or failed to disclose that: (i) it was not true that Overstock would be able to support the launch of its tZERO cryptocurrency with earnings or cash flow from its Retail operations; (ii) the foreseeable likelihood that Overstock’s ability to accomplish its intended short squeeze would embolden the SEC or even market participants, such as major brokerage houses, to act to prevent this market manipulation; (iii) it was also not true that Overstock contained adequate systems of internal operational or financial controls; and (iv) the defendants lacked any reasonable basis to claim that Overstock was operating according to plan, or that Overstock could achieve guidance sponsored and/or endorsed by defendants.
If you wish to discuss this securities fraud class action lawsuit or have any questions concerning this notice or your rights or interests with respect to this litigation, please contact Kessler Topaz Meltzer & Check (James Maro, Jr., Esq. or Adrienne Bell, Esq.) at (844) 887-9500 (toll free) or (610) 667–7706, or via e-mail at [email protected].
Overstock investors may, no later than November 26, 2019, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, or other counsel, or may choose to do nothing and remain an absent class member. A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. In order to be appointed as a lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.
Kessler Topaz Meltzer & Check prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world. The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars). The complaint in this action was not filed by Kessler Topaz Meltzer & Check. For more information about Kessler Topaz Meltzer & Check, please visit www.ktmc.com.
Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 887-9500 (toll free)