SAN DIEGO & NEW YORK--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that purchasers of Weight Watchers International, Inc. (NASDAQ: WTW) filed a class action complaint against the company for alleged violations of the Securities and Exchange Act of 1934 between May 4, 2018 and February 26, 2019. Weight Watchers offers a subscription-based weight loss program.
View this information on the law firm's Shareholder Rights Blog: https://www.robbinsarroyo.com/weight-watchers-international/
Weight Watchers Accused of Inflating Stock Price and Insider Trading
According to the complaint, in 2017, Weight Watchers provided guidance for its earnings and subscriber count for the upcoming fiscal year 2018 and three-year fiscal 2020. Since then, it had repeatedly stated its confidence in its ability to reach five million subscribers and drive revenues in excess of $2 billion by the end of 2020. In May 2018, Weight Watchers raised its FY18 financial guidance and provided positive commentary regarding its business metrics, financial prospects, and strong subscription and retention momentum. Later that month, Weight Watchers announced a secondary stock offering for $69 per share, and raised almost $600 million in gross proceeds for its controlling shareholder, Artal. In August 2018, executives disclosed the loss of 100,000 subscribers. As a result, the stock price dropped 15%. Less than a week later, Artal sold 6 million of its personally-held shares, generating another $464.34 million in proceeds. A few months later, the stock price dropped another 30% when Weight Watchers announced the loss of 300,000 subscribers, but emphasized its confidence to reach its goals. Finally, the truth came out in February 2019 when Weight Watchers issued a press release announcing the continuing decline of its subscribers and enrollment rate. In response, the stock plummeted over 30%, closing at only $19.37 per share on February 27, 2019, and it continues to trade significantly below the stock’s class period high.
Weight Watchers Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Leo Kandinov at (800) 350-6003, LKandinov@robbinsarroyo.com, or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
Attorney Advertising. Past results do not guarantee a similar outcome.