SAN DIEGO--(BUSINESS WIRE)--Robbins Geller Rudman & Dowd LLP (“Robbins Geller”) announces that a securities class action case was filed on behalf of purchasers of Overstock.com, Inc. (NASDAQ:OSTK) securities between August 3, 2017 and March 26, 2018 (the “Class Period”). This action was filed in the District of Utah and is captioned Morris v. Overstock.com, Inc., Case No. 2:18-cv-00271.
The Private Securities Litigation Reform Act of 1995 permits any investor who purchased Overstock.com securities during the Class Period to seek appointment as lead plaintiff. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. If you wish to serve as lead plaintiff or have questions concerning your rights, please contact Brian Cochran of Robbins Geller at 800/449-4900 or 619/231-1058, or via e-mail at email@example.com. Robbins Geller has not filed a complaint in this action. Lead plaintiff motions must be filed with the court no later than 60 days from March 29, 2018.
The complaint charges Overstock and two of its senior executive officers with violations of the Securities Exchange Act of 1934. Specifically, the complaint alleges that during the Class Period, defendants issued false and misleading statements and/or failed to disclose adverse information regarding Overstock’s business and prospects, including that Overstock subsidiary tZero’s initial coin offering was highly problematic and potentially illegal and that the Company’s Medici Ventures business was hemorrhaging money. As a result of defendants’ allegedly false statements and/or failure to disclose this adverse information, the price of Overstock common stock was artificially inflated during the Class Period to as high as $88 per share.
On March 1, 2018, Overstock announced that the SEC had requested information about its initial coin offering, causing the price of its stock to fall more than 4%. On March 15, 2018, the Company stated that “the investigation could result in a delay of the tZero security token offering, negative publicity for tZero or us, and may have a material adverse effect on us or on the current and future business ventures of tZero.” Overstock also disclosed that the SEC was conducting an examination of advisers at tZero and that Medici had lost $22 million for 2017, despite the fact that Bitcoin prices had increased by 1,375% during that time. On this news, the Company’s stock fell more than 5% to $45.70 per share.
Then, on March 26, 2018, Overstock announced that it planned an underwritten secondary public offering of 4 million shares of Overstock common stock. The prospectus for the secondary offering stated that the Company had already invested $107 million since 2014 in Medici, and that the proceeds of the secondary offering would further increase that investment. Among the Medici investments disclosed in the prospectus was the Company’s 50% stake in DeSoto Inc., which the Company admitted “does not expect to generate revenues or profits in the foreseeable future” and “does not currently have a specific plan to generate revenues or profits.” On the announcement of the secondary offering, the Company’s stock fell an additional 15%. Subsequently, on April 2, 2018, the Company pulled its secondary stock offering citing market conditions.
Robbins Geller is one of the world’s leading law firms representing investors in securities litigation. With 200 lawyers in 10 offices, Robbins Geller has obtained many of the largest securities class action recoveries in history. For five consecutive years, ISS Securities Class Action Services has ranked the Firm in its annual SCAS Top 50 Report as one of the top law firms in both the amount recovered for shareholders and the total number of class action settlements. Robbins Geller attorneys have helped shape the securities laws and recovered tens of billions of dollars on behalf of aggrieved victims. Beyond securing financial recoveries for defrauded investors, Robbins Geller also specializes in implementing corporate governance reforms, helping to improve the financial markets for investors worldwide. Please visit http://www.rgrdlaw.com for more information.