SAN DIEGO & MILWAUKEE--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that a purchaser of A.O. Smith Corporation (NYSE: AOS) has filed a class action complaint against the company for alleged violations of the Securities and Exchange Act of 1934 between July 26, 2016 and May 16, 2019. A.O. Smith manufactures and markets water heaters and boilers.
View this information on the law firm's Shareholder Rights Blog: https://www.robbinsarroyo.com/a-o-smith-corporation/
A.O. Smith Accused of Misleading Investors
According to the complaint, A.O. Smith has operated in China for over 20 years. In 2018, A.O. Smith boasted "record" sales of $3.2 billion of which China sales exceeded $1 billion. However, in April 2019, A.O. Smith reported disappointing financial results, primarily due to plummeting Chinese sales. Quarterly earnings for the related segment fell over 65% year-over-year. On this news, A.O. Smith's stock fell over 5%. However, A.O. Smith played it off as a temporary weakness related to macro events. Then in May 2019, J Capital Research USA LLC issued a scathing report on A.O. Smith's chain operations and its undisclosed relationship with Jiangsu UTP Supply Chain ("UTP"), an undisclosed partner in China. The report charged A.O. Smith with inflating its sales and earnings figures, and revealed that UTP may be responsible for as much as 75% of A.O. Smith's China sales. A.O. Smith's attempted denials revealed that it did in fact have substantial business interests in China with UTP. Following the unsatisfactory response, A.O. Smith's stock continued to fall, closing at $43.26 per share on May 20, 2019, 36% below the class period high of $68 per share.
A.O. Smith 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.
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