Robbins Arroyo LLP: Tempur Sealy International, Inc. (TPX) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Tempur Sealy International, Inc. (NYSE: TPX) in the U.S. District Court for the Southern District of New York. The complaint is brought on behalf of all purchasers of Tempur Sealy securities between July 28, 2016 and January 27, 2017, for alleged violations of the Securities Exchange Act of 1934 by Tempur Sealy’s officers and directors. Tempur Sealy, together with its subsidiaries, develops, manufactures, markets, and distributes bedding products worldwide. Mattress Firm was Tempur Sealy’s largest customer.
Tempur Sealy Accused of Downplaying Adverse Effects of Mattress Firm’s Acquisition
According to the complaint, Tempur Sealy officials made a series of misleading statements in press releases, analyst calls, and filings with the U.S. Securities and Exchange Commission about the company’s financial condition. During a conference call with investors on July 28, 2016, Tempur Sealy officials noted increasing sales for the second quarter of 2016 and made positive financial projections for the upcoming quarter. In response to an analyst question on the company’s areas of weakness, Scott L. Thompson, Tempur Sealy’s Chief Executive Officer, assured investors that there were no new developments that were a cause for concern.
On August 7, 2016, Steinhoff International Holdings NV agreed to buy Mattress Firm and thereafter entered into renegotiations of the terms of their existing supply agreements with Tempur Sealy. At a conference on September 27, 2016, Tempur Sealy officials remained optimistic that Mattress Firm’s rebranding effort associated with the acquisition would be successful and that Tempur Sealy’s sales to Mattress Firm would normalize and improve in the upcoming quarters.
Despite Tempur Sealy’s positive representations about its financial state, the complaint alleges that Tempur Sealy officials failed to disclose that Mattress Firm, which accounted for approximately 25% of Tempur Sealy’s net sales, was actively engaged in negotiations to be acquired, and that any such acquisition could have an adverse effect on Tempur Sealy’s 2016 third and fourth quarter operating results. On January 30, 2017, Tempur Sealy issued a press release announcing that due to its inability to reach a resolution with Mattress Firm and Steinhoff regarding the modification of their existing agreements, Tempur Sealy would cease doing business with Mattress Firm during the first quarter of 2017. On this news, Tempur Sealy’s stock price fell by $20.19 per share, or approximately 32%, to close at $43.00 per share on January 31, 2017.
Tempur Sealy Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Leonid Kandinov at (800) 350-6003, or you can complete the form below and we will contact you directly.
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