BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors who purchased Cnova N.V. ("Cnova" or the "Company") (Nasdaq: CNV) securities issued in connection with the Company’s Initial Public Offering on or about November 19, 2014 (the “IPO”) and/or between November 19, 2014 and December 18, 2015, inclusive (the “Class Period”). Injured investors are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action.
On December 18, 2015, the Company reported that it had “engaged legal advisors and external forensic accountants to perform a review of issues in connection with employee misconduct related to inventory management.” On this news, shares of Cnova fell $0.53, or nearly 18%, to close at $2.42 per share on December 21, 2015, on unusually heavy volume, thereby injuring investors.
On January 12, 2016, the Company issued an update on its review of inventory management. The Company disclosed that: (1) it had uncovered an overstatement of Cnova net sales, (2) there was a “material discrepancy” in accounts receivable, and (3) that a 10% write-off of total inventory was necessary, among other issues. On January 20, 2016, Cnova closed at $2.28 per share, nearly 70% below the IPO price of $7.00 per share.
The complaint charges Cnova and certain of its officers, directors, and underwriters of the Company’s IPO with violations of the federal securities laws. Specifically, the complaint alleges that, within the Company’s IPO registration statement, and/or throughout the Class Period, defendants failed to disclose: (1) that the Company overstated net sales; (2) that the Company failed to properly write-off the value of certain returned items; (3) that there was a material discrepancy in accounts receivable related to the damaged/returned items; (4) that, as such, the Company’s EBIT was overstated; (5) that the company lacked adequate internal controls; and (6) that, as a result of the foregoing, the Company’s financial statements and Defendants’ statements about Cnova’s business, operations, and prospects, were materially false and misleading at all relevant times.
If you purchased Cnova securities during the Class Period you may move the Court no later than March 21, 2016 to ask the Court to appoint you as lead plaintiff if you meet certain legal requirements. 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 wish to learn more about this action, or if you have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at http://www.howardsmithlaw.com.
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