Cnova N.V.

Robbins Arroyo LLP: Cnova N.V. (CNV) Misled Shareholders According to a Recently Filed Class Action

Robbins Arroyo LLP announces that a class action complaint was filed in the Supreme Court of the State of New York, County of New York. The complaint alleges that officers and directors of Cnova N.V. (NASDAQGS: CNV) violated the Securities Act of 1933 by filing a misleading Registration Statement and Prospectus (collectively, “Registration Statement”) in connection with the company’s initial public stock offering (“IPO”) on November 20, 2014. Cnova operates as an eCommerce company in Europe, Latin America, Asia, and Africa.

Cnova Accused of Filing Misleading Registration Statement

According to the complaint, Cnova’s Registration Statement failed to disclose that the company’s operations were in the midst of a serious slowdown and that the company’s Brazil operations lacked sufficient controls, specifically, the handling of product returns and damaged product inventory at Cnova’s Brazilian distribution centers. On November 20, 2014, using the false and misleading Registration Statement, Cnova successfully raised approximately $188 million in its IPO, collectively selling 26.8 million shares at $7.00 per share. The Registration Statement stressed the company’s particular strength in Brazil, and emphasized the company’s increased market share and profitability in the Brazilian market.

On January 29, 2015, Cnova revealed for the first time that its Brazilian operations were in the midst of a marked slowdown. The company missed the consensus estimate for the fourth quarter 2014 adjusted EBITDA and announced first quarter 2015 sales guidance that was much lower than analysts were expecting. Cnova claimed that macroeconomic conditions were responsible for the slowdown, but analysts were unconvinced, noting that the company’s Q4 results were not in line with its statement. On January 30, 2015, a Deutsche Bank analyst stated that Cnova’s fourth quarter gross profit and EBITDA missed its estimates by 5% and 33%. On this news, Cnova stock fell from $7.37 to $5.50 per share, or over 25%, over the course of two days. Then, on December 18, 2015, Cnova announced that the company’s Board of Directors engaged legal advisors and external forensic accountants to perform a review of issues in connection with employee misconduct related to inventory management predominantly in Brazil. On this news, Cnova’s stock fell $0.53, or nearly 18%, to close at $2.42 per share on December 21, 2015.

Cnova Shareholders Have Legal Options

Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.

 

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