SAN DIEGO & MIDVALE, Utah--(BUSINESS WIRE)--Shareholder rights law firm Robbins LLP reminds investors that a purchaser of Overstock.com, Inc. (NASDAQ: OSTK) filed a class action complaint for alleged violations of the Securities Exchange Act of 1934 between May 9, 2019 and November 11, 2019. Overstock.com operates as an online retailer in the United States and Internationally.
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Overstock.com, Inc. (OSTK) Accused of Misleading Shareholders
According to the complaint, in May 2019, Overstock touted a return to profitability after an extended period of losing money and raised its year-end guidance by 50%. Meanwhile, Overstock launched its cryptocurrency project tZERO, which cost shareholders $100 million. Throughout the relevant period, Overstock issued a series of press releases and statements that promoted its transition to the cryptocurrency exchange service provider and the benefits it would provide investors. However, Overstock failed to disclose that tZERO had actually been designed to create a short squeeze by offering a digital token dividend that would not be registered and could not be resold for at least six months, thwarting any short selling. Before the market learned of Overstock's scheme, its CEO liquidated over $102 million of his own Overstock shares. Finally, on September 22, 2019, investors learned the SEC would not allow Overstock to issue locked-up crypto dividends and that the Company was lowering guidance to break-even EBITDA for the year. Following this news, Overstock shares experienced the largest stock drop in the Company's history. Shares of Overstock.com currently trade at around $7.80, a decline of 71% from the class period high of $26.89.
Overstock.com, Inc. (OSTK) Shareholders Have Legal Options
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